lets say u borrow 500k for 30 year 4%, at the end u have to pay 359k interest on top of the 500k.

but if u pay 100k downpayment and borrow 400k for 30 years at 4%, at the end u have to pay 287k interest on top of 500k.

difference is u save rm 72k on interest

but, if u take that 100k and dump into epf lets say 5.5% for 30 years, u will have 498k after 30 years.

minus the 72k due to house loan interest difference, u still have 426k extra.

so for me, is really no brainer la, i sure whack highest loan tenure as possible and save the money elsewhere with higher return than house loan.

but will get in trouble if use it to leverage and borrow more to goreng house. once opr hike more than epf rate then gg

my father generation house loan was much higher than epf. as high as 10% during 98 crisis or so.

that time u better whack everything u got to pay off the house loan.

simple math la come on. use house loan calculator/compounding calculator to count and u will see the numbers.

as long as interest u can earn > house loan interest then u are safe to keep there.

500k



400k


and for 100k that u put in epf with 5.5% u will get 4.96x 100k after 30 years

This post has been edited by darkterror15: Oct 10 2023, 04:49 PM

ok, my bad. forgot to count the difference in monthly loan if it were put into epf as well.

yup, forgot to add in the saving per month if borrow less.

but anyway, now most of the house loan are semi flexy or even full flexy. you can pay extra if u have more money and no place to put.

i am using hong leong and yes have to go counter and submit form if u want to pay the principle

his calculation is correct. but to have a bigger saving u need to increase the interest rate you are getting, or the bigger the downpayment u going to put become your initial investment.

i was giving sample of 500k vs 400k borrow.

but if i use 500k vs 300k at 4.0% house loan rate vs investment rate of 6.5% then the difference will be bigger.

500k at 4% rate for 30 years u need to pay 359k interest on top of 500k initial loan value.

300k at 4% rate for 30 years u need to pay 215k interest on top of 500k initial loan value.

interest saving is 144k.

now, every month repayment for 500k loan is 2387 vs 1432 for 300k loan, which is 955 difference.

assume all the 955 u invest in 6.5% interest yield every month, then for 30 years u will get 990k.

so sum for 300k loan after 30 years is 144k saving from interest and 990k for investment = 1.134m

for 200k investment at 6.5% for 30 years give u 1.322m

the difference will be 189k more after 30 years if u decide to borrow full loan and invest 200k downpayment.

if u have 300k downpayment as investment it will be even greater difference at 283k