Assuming you are buying a 600K condo and you have 300K in the bank, how much loan would you still take? Do you go for the maximum allowable loan amount (90%) or do you actually use the 300K as downpayment so that you only need lesser loan and thus lower monthly repayment?

Which one makes more financial sense?

Or would you take 90% loan and put the 300K in the loan account (say Flexi-loan) to reduce the interest?

Thanks!

parking

Flexi ofcourse.

I could have written this post: I got similar figures. Here's what I did (slightly adapted to your figures):

* 75% loan (~ 450k)
* Maximum tenure allowed (e.g. 30yrs)
* Fully flexi loan
* Paid 150k upfront and dumped 150k into the loan to offset interest

Why?

* Easier to get the loan approved when you ask for a smaller amount
* I couldn't ask for 90% anyway
* Ran the numbers to come up with a monthly repayment I'm happy with (2.2k/month).
* Once loan approved, you can't lower the monthly repayment amount without refinancing.
* You can however reduce the loan tenure and interest paid by dumping extra cash into the loan account
* 90% loan would have meant a higher monthly repayment.

In the end, I only have to serve a 300k loan, with an acceptable 2.2k/month repayment and still have 150k of cash available if needed.

Many thanks for the detailed explanation!