hackwire,

You have X amount of money.

A) You can collect 4% to 5% per year.

Or,

B) You can collect 6% to 7% per year.

Is (A) or (B) a better choice??

If you choose (A) means that you left the money in EPF.

If you choose (B), you take the EPF money out to reduce your housing loan.

Do you want your money to make 4% to 5% or 6% to 7%?

That is the question.

Dreamer

guanteik,

You have a housing loan, If you pay off earlier, you save 6% to 7% per year. If not, you pay 6% to 7% per year.

Dreamer

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Added on September 16, 2007, 11:12 amhackwire,

We are NOT talking about buying a house for investment. Most people buy a house to live. And, they have a housing loan that they pay 6% to 7% interest per year. Given EPF is ONLY paying 4% to 5% per year, people could get a better return and save 2% to 3% of interest by withdrawing the EPF to pay the housing loan.

Now, which part do you NOT understand??

Most people are not rich enough to buy house for investment. They buy house to stay. Having a house that is fully paid off will make their retirement easier and cheaper.

Dreamer

This post has been edited by dreamer101: Sep 16 2007, 11:12 AM