Oh dear. I thought I was being helpful. But it’s hard to explain the finer details on a forum. In any case, the 1.25% was given as an incentive for me to take up the max loan, and to keep the $3,000,000 with them for a year. It is NOT a rolling FD and the interest rate would not be repeated on due date (it’ll revert to the usual existing FD rate in Singapore about 8 or 9 years ago, which was 0.25%).

I apologize if I confused people - I thought it was instantly obvious that the banks would NEVER pay more in FD rates than they could make from lending rates.

i heard of this practice before. in order for the bank to lend you money at preferential rates, the borrower need to pledge certain amount of FD first.

just realize ts wanna buy for investment/flipping... then is no brainer, maximum loan

roi is profit over capital used...

200k you can down payment a few more liao...hahahaha

package deal lah...

true, i can leverage my liquid funds to invest in 3 properties.

yeah was a bit confusing also...hahaha...

but epf dividend >> loan rate >> fd rate...

and if savvy enough on investing, you can get 10-15% returns

then managing cash flow is your priority....overstretched == bank lelong

Leverage amplify profit as well as losses.

Looking for help to see if I have missed a trick with the maths of a conundrum with the current FD/Home Loan interest rates.

Trying to figure out if better to take home loan of RM 500K at 4.15% for 10Y and keep my savings of RM 500K in FD at 4% for 10Y (recognise this is not a given, and FD rates can change going forward ) or dumping the RM500K into the house and not take the loan.

Somehow, the math shows I am better off taking the loan and keeping my savings in FD.

1. Loan of RM 500K @ 4.15% for 10Y

- Monthly repayment = RM 5098
- Total payment for whole loan = RM 611757

2. Savings of RM 500K @ 4% into FD for 10Y (with the "brave" assumption that this is available and rates remain over the 10Y).

- Value of savings at the end of the 10Y = RM 740122

3. Gain - i.e. (2) minus (1) = RM 128K.

- Hence, above points towards taking the loan, and keeping my savings in FD.
- Above ignored inflation and time value of money for simplification (can't figure out the maths).

Hope to get help on the following

1. Are the numbers correct (with the brave assumption about FD can be available at 4% for 10Y) ?
2. Will impact of inflation (say at 3-4%) change the maths above (can't figure out how to work the maths).....?


Thanks in advance - welcome any wise counsel.

the above is good if you can keep on paying the housing loan repayment till the end.
Housing loan works on reducing balance,....every time you do a repayment, the principal is reduced and until a certain period, the amount of repayment you pay is higher than the interest charged amount, thus you pay less interest and pay more principal.
FD works on compounding balance,....every time the interest is added into your principal, the amount of your principal goes bigger, thus you will earn more interest on it and it rolls over and over again.

you cannot see the inflation effect from the maths above, you can only see the effect of it by the lost of purchasing power over time.....

This post has been edited by MUM: Dec 15 2019, 03:02 AM

taking loan has ancillary costs - mrta, legal fee, valuer fee

This post has been edited by timidandslow: Dec 15 2019, 11:18 AM

I’ll show you the amortization calculator and you decide whether you’ve calculated correctly or otherwise:



And the total interest paid at the end of 10 years:



You can check that with any online amortization calculator.

Good luck.

Thanks for the comments