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Old 01-04-2014, 12:17 AM
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Originally Posted by Unregistered View Post
Our jobs are stable and we can most likely able to work until 65. Our expenses are not high as we only have a son and we don't drive.

We see our monthly mortgage payment (using CPF and cash) like forced savings and when we reach 65 and retire, we can sell the condo (after enjoying condo living for 25 years), say at $1.6m, and then buy the HDB studio unit (for old folks). This HDB studio cost only $100k. We can then retire with the $1.5m cash.
To be honest your plan puts you from an area with a safety net to one without, and also makes no financial sense what so ever. Plainly cause

1. Your income of 120K is not high but not exceedingly, if one of you loses your job you will likely struggle with the monthly repayment + MCST + Prop tax etc which is about 3K to 3.5K per month. Assuming 600K 25 years @ 2.5% (And yes interest rates have gone higher before)

2. You want to buy a 99 year leasehold (err leasehold depreciates over time) for 1.2 Million and sell it 25 years later for 1.6M. How did you arrive at this figure? I have a freehold condo worth 1.1 M now West of SG, by that logic in 25 years it should be worth 2.5 Million and a small Condo in orchard would be 10 Million etc. No offence the figures you proposes are kind of washy and no one predicts 25 years in the future. (even the SG govt does dare not to commit)

Imagine if you sell your HDB now at CUV (Cash under valuation) buy a 1.2 M condo, market slumps (now worh 900K) and 25 years later worth 1 Million (Though I suspect less). How would that impact your future plans?

I am long term property investor and I can say your "forced savings plans" and future valuation figures are non too realistic. I would advise you to speak to your friends who are investment savvy in property.

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