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kalimantan

Can Calculate For Me ?

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owe 380k in housing loan (condo)

plan to pay 100k (withdraw from fund)

interest rate 1.99%

How much of Savings of interest compare to put 100k in funds ?

yes funds earnings are more than 1.99% ..so logically should not withdraw them to pay loan ?

What would be your strategy ?

 

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actually there is a lot of misconception that as long as above interest rate, keep running the fund.

If my actual fund is only 100k, while my loan is 380k, the returns of the fund must be super-high to cover the interest payment of 1.99 of 380k.

Of course if my fund balance is 380k which is equal to the loan of 380k, then it makes calculation easier.

 

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actually there is a lot of misconception that as long as above interest rate, keep running the fund.

If my actual fund is only 100k, while my loan is 380k, the returns of the fund must be super-high to cover the interest payment of 1.99 of 380k.

Of course if my fund balance is 380k which is equal to the loan of 380k, then it makes calculation easier.

that would be one way of looking at it, and it would be nice if the 100k can generate overall returns enough to cover the interest on the 380k loan. likewise, it's also one way of looking at the actual return on, say, a 500k investment that can cover the interest payments on the loan, but the rate of return (percentage) may not be as attractive. for simplicity's sake, say the interest on the loan of 380k is 1% ie. 3800. a 3800 return on 500k investment is 0.76% - does that make the investment worth keeping?

there are also hard-to-quantify factors like peace of mind, your partner's wishes, etc cos some people are just not comfortable with debt. also there are liquidity factors too - whether investments can be realised fast enough for one's purposes etc etc

i'm trying to learn as much as possible from you more experienced ones; would love to hear how you decide in the end :)

Edited by random_username
 

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Wife: pay bank 100K.

bepgof: with my yr of experience, can generate abt 8% roi in stk mkt. So???

True story on me.

- more than 200k cash in stk mkt

- existing resale 5rm(528k bought in dec 2009) os mortage abt 81K, wife has been po ro so me to redeem since Jan 2011, I say wait....

- Tah boleh tahan her po ro so, asked lawyer to proceed the redemption in May 2011. Completion on 1 Sept 2011.

owe 380k in housing loan (condo)

plan to pay 100k (withdraw from fund)

interest rate 1.99%

How much of Savings of interest compare to put 100k in funds ?

yes funds earnings are more than 1.99% ..so logically should not withdraw them to pay loan ?

What would be your strategy ?

 

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