One of the initiatives that were rolled out by MAS in order to assist homeowners during this period of Covid-19 is to allow for deferment of home mortgage payment.
As more than 90% of all Singaporeans tend to be homeowners, this measure will enable most people to take a breather in the midst of this pandemic crisis, which have seen plenty of job losses or pay cuts.
The deferment will revolve in between May to Dec 2020, so we are talking a period of about 8 months. This is not a long time, considering that most of us are already on a 20 to 30 years mortgage.
In the last article, I wrote that I will be applying for the deferment because I see the positive upside more than over the negatives.
In this article, I will pan out my reasons why I chose to do so.
For disclosure purpose, my application was approved by the bank with a facility letter as prescribed below.
1.) Cashflow Breather
One of the most obvious reason why the measure was rolled out was to enable homeowners a cashflow breather, especially in the midst of the pandemic crisis where uncertainty hangs towards job guarantee and pay cuts.
For the majority of us who has mortgages as one of our big expenses to cater to, the loss of employment could mean that homeowners might default or have difficulties making payments to their monthly mortgages. This could not only be detrimental to the industry as a whole but also towards individual’s credit score.
For myself, the deferment allows my current position to be more cashflow positive than previously because I am still collecting rental which means the income will go directly to my pocket without having to serve the mortgage during this period.
I could then use this excess income to beef up my emergency funds and/or capital injection as warchest.
2.) Mortgage Interests Rates Are Heading Southwards
We are currently in an era where every central banks are cutting interest rates and are heading towards zero funds rate.
What this means for homeowners is we are likely to pay cheaper borrowing rates as our mortgage rates are dependent on SIBOR, which has been on a trend down since 2017.
The current 3 months SIBOR is at 1.6% and this number will look to go down further in the next couple of months.
In fact, just last month alone, I’ve received a letter from the bank that they have revised the repayment downwards due to the lower interest rate.
P.S: If you’re currently paying more than 1.6% and are relooking to refinance into floating, you may refer to my link here where a consultant will contact and advise your availability to refinance.
3.) Interests Will Only Accrue On Your Principal (T&C)
Most banks will allow for 2 types of deferment.
The first is a deferment of only the principal, which means you will still required to service the interest amount.
The second is a deferment of both the principal and interest, which means you are not required to service anything during the deferment period.
For the majority of the banks (need to refer to their T&C), interest will only accrue on the principal but not on the interests. This implies that only simple interests will apply and not on compounding interests.
You compare this with how compounding complies with your credit card debt and you will understand what I mean.
4.) Deferment is a Short Period
The 8-month deferment period is a short subset of the overall mortgage period, which for most tends to be for as long as 20 to 30 years.
What this means is that you are simply extending your current loans from 30 years to 30.8 years, which is not a big deal by any standard.
But the option of having this will have a bigger impact to many, especially those who needed them badly during this period.
Banks will also show you how much interests are being accrued during this deferment period, which for my case below shows $12,474.85.
One has to be very careful when reading and comparing this.
It does not means that I will be better off by $12,474.85 if I hadn’t taken this deferment option as I am likely to incur interests accrued under normal circumstances. What this means is throughout my tenure period, I will be worse off by $12,474.85, which in arrears of a long 30 years, came out to be a very small amount of re-amortisation every month post-deferment.
5.) Find Something That Is Above 1.6% ROI
Even if I do not urgently need the cashflow at this point, all I needed to do is to find an investment that will return me 1.6%/annum for me to be “better-off”.
I could look for investment opportunity in the market or simply lock this money into an CPF-SA (would be stupid for me to do so) or leave it at DBS Multiplier for emergency funds purpose.
I think at this point, while the cons are there with higher repayment being re-amortized post-deferment, the advantage has clearly outweigh the cons, at least for me and this is the reason why I chose to do so.
Hi B, the deferment can be up to 8 months?
Wow, I confirmed my refinancing end Jan to take effect Apr. It is the wrong timing as I incurred higher interest of 1.8% fixed rate 2y. If it will be in Feb, I will have taken the floating rate. Anyway, I am always bad in timing.
I am actually surprised that the interest rate is not lower than in 2010 when I got 1.6% and less than 0.85% following year.
Also, I had pare down more than >6 figs LS repayment. Initially I wanted to pay down even more, but towards end Jan, I started to tink about Covid and reduce it. Now cannot reverse anymore… arggg….
Hi Rolf
Yeah the deferment they allowed it for 8 months but its not free lunch.
You pared down 6 digits by lump sum so you must be pretty confident about the state of your cashflow.
☑️☑️COMPOSITE CYBER SECURITY SPECIALISTS ☑️☑️
•• Are you Seeking for the Best Legit Professional Hackers online?
Congratulations Your search ends right here with us. •• ⚡️⚡️
☑️☑️For Years Now We have Been helping companies secure there Infrastructures against malicious Attacks, however private individuals have been making use of our services to provide Optimum solutions to their cyber and Hacking related Issues by providing them unlimited Access to their desired informations from their Target such as Phone Hack (Which enables them to monitor their kids/wife/husband/boyfriend/girlfriend, by gaining access to everything they are doing on their phone without their notice), Credit Card Mishaps, Website Hacking, Funds Recoveries And Every Other Cyber Related Issues That has to Do With HACKING.
☑️☑️COMPOSITE CYBER SECURITY SPECIALISTS is a vibrant squad of dedicated online hackers maintaining the highest standards and unparalleled professionalism in every aspect.
We Are One Of The Leading Hack Teams In The United States With So Much Accolades From The Deep Web And IT Companies. ••
••We Offer Varieties Of LEGIT Hacking Services With the Help Of Our Root HackTools, Special HackTools and Our Technical Hacking Strategies Which Surpasses All Other Hackers.
☑️ Below Is A Full List Of Our Services:
▪️ FUNDS RECOVERY ON SCAM INVESTMENTS, BINARY OPTIONS TRADING and ALL TYPES OF SCAMS.
▪️ WEBSITE AND DATABASE HACKING 💻
▪️ CREDIT REPAIR. 💳
▪️ PHONE HACKING & CLONING (giving you 📱 Unnoticeable access to everything Happening on the Target’s Phone)
▪️ CLEARING OF CRIMINAL RECORDS ❌
▪️ SOCIAL MEDIA ACCOUNTS HACKING 📱
▪️RECOVERY OF DELETED FILES 📤
▪️LOCATION TRACKING 📌
▪️BITCOIN MINING ⛏ And lot More.
☑️We have a team of seasoned PROFESSIONALS under various skillsets when it comes to online hacking services. Our company in fact houses a separate group of specialists who are productively focussed and established authorities in different platforms. They hail from a proven track record and have cracked even the toughest of barriers to intrude and capture all relevant data needed by our Clients. Some Of These Specialist Includes ⭐️ DAWID CZAGAN⭐️ JACK CABLE ⭐️ SEAN MELIA ⭐️ ARNE SWINNEN ⭐️And More. All you Need To do is To Write us a Mail Then We’ll Assign any of These Hackers To You Instantly.
☑️COMPOSITE CYBER SECURITY SPECIALISTS is available for customer care 24/7. Feel Free to Place your Requests.
☑️☑️CONTACT:
••• Email:
[email protected]
🔘2020 © composite cybersecurity specialists
🔘Want faster service? Contact us!
🔘All Rights Reserved ®️.
I am LIGHT STREAM loans Service Lender, we are a legit, registered and guaranteed loan company and we give out loans to individuals, companies, government establishments, churches and business organizations and people of all sorts. Are you in need of a loan for any purpose? Are you in a financial problem? Do you need financial solution?.LIGHT STREAM loans Service is the solution to all your financial problems, our loans are easy, cheap, and quick. Contact us today for that loan that you desire, we can arrange any loan to suit your budget at only 3% interest rate. If interested, contact us immediately via email,([email protected])
ACCOUNT TAKEOVER (ATO) attacks are on the rise and are costing individuals, businesses, and organizations significant financial and reputational damage that are often difficult to recover quickly.
Cybercriminals use stolen credentials such as usernames and passwords obtained by malware and social engineering to gain sensitive information, and they’re using that same data also to access websites and banking/ Bitcoin accounts wallet to transfer money, execute fraudulent transactions and bring down to a Zero point
M&D is a group of equipped Hackers come together as a team to track down & to recover whatever that has being stolen back from the most difficult internet SCAMMERS. NOTE!! We've received countless heartbreaking reports of notorious cyber scammers and we’ve successful recover them back.
contact us on ((Binary Recovery. Files stolen, University Graded, Password retrieved, Wiping Criminal Records, FB & IG Telegram Hack, & Phone Hacking)) border us with your jobs & allow us give you positive result with our hacking skills.
Email [email protected] [email protected] [email protected] we Guarantee you up to %85
REMEMBER YOUR HAPPINESS IS OUR PRIDE
ACCOUNT TAKEOVER (ATO) attacks are on the rise and are costing individuals, businesses, and organizations significant financial and reputational damage that are often difficult to recover quickly.
Cybercriminals use stolen credentials such as usernames and passwords obtained by malware and social engineering to gain sensitive information, and they’re using that same data also to access websites and banking/ Bitcoin accounts wallet to transfer money, execute fraudulent transactions and bring down to a Zero point
M&D is a group of equipped Hackers come together as a team to track down & to recover whatever that has being stolen back from the most difficult internet SCAMMERS. NOTE!! We've received countless heartbreaking reports of notorious cyber scammers and we’ve successful recover them back.
contact us on ((Binary Recovery. Files stolen, University Graded, Password retrieved, Wiping Criminal Records, FB & IG Telegram Hack, & Phone Hacking)) border us with your jobs & allow us give you positive result with our hacking skills.
Email [email protected] [email protected] [email protected] we Guarantee you up to %85
REMEMBER YOUR HAPPINESS IS OUR PRIDE
Hello,
Just for my enlightenment, why is putting into CPF SA a stupid tactic? Is it because its illiquid?
I assume you borrowed a bank loan?
Hi Turbo
Just to clarify, it's not a silly strategy, it's just silly for my own case because I needed a cashflow liquidity and putting one on top of SA will not have helped me solve the issue.
Hi! Do you know whether deferring the payments will extend your lock-in period?
Hi Clara
I don't know for sure but I think it won't affect your lock in period cos your interests are still running.
This comment has been removed by the author.
Hi B, I tried applying for the deferments of mortgage and let's see if they approve.
Normally after every refinance period, I will pare down LS. Actually in Jan I requested for a larger amt LS repayment, but due to covid, I hesitated and had a last min cut. But still 100 over K payments and a part of it actually comes from my OA which I did not wipe out previously.
My cash position is still comfy in my own standard. I reckon sufficient bullets to survive w/o job and to invest in the downturn I think. But it does not come easy. It is patience for the past years. And I also have other income aside job coming from rental of property. So I guess it is quite ok.
Still, I think it is better to be cautious in using our cash during this unprecedented times of uncertainty.
Hi Rolf
Since your cash buffer is still sufficient, then I think you don't have to defer cos it will then defeat your original intention to do a lump sum repayment which is to save on the interest costs. By deferring, you are reversing your earlier action.
"Banks will also show you how much interests are being accrued during this deferment period, which for my case below shows $12,474.85.
"all I needed to do is to find an investment that will return me 1.6%/annum for me to be "better-off".
I dont think its correct to break-even with 1.6% in 1 year.
Plainly looking, assume u are paying $3000 a month for mortgage, you are 'borrowing' $24,000 and paying $12,000 interest for that. — based on simple interest computation, u need to make 1.6% every year for 31years to break even.
CPF gives 2.5% interest tho, so u can effectively put the 24k into cpf and get back your interest within 20years.
but then there is the 12k which u need to pay interest for thereafter….
why the interest is so high for this 'scheme', cos the interest is charged based on the larger quantum that was outstanding.
my take on this is 3 categories of people shd do this:
1. Those facing dire cash flow problems and really need the cash right now to tide over this crisis.
2. Those who have only 1-2 years of mortgage left with the bank, the accured interest will be very low and can easily beat the bank interest rate with the cash 'received'
3. Those who are financially savvy enough to consistently generate a return of more than 3% annually over the next 20years.
Welcome any thoughts and comments…
Hi Keizen
Your thoughts are correct.
I wasn't referring to 1.6% in one year but 1.6%/annum for the next mortgage life. To be honest, it's not very difficult to beat, like you said even dbs multiplier, cpfoa can easily beat for now, let alone Equities return. I am of course also assuming folks who are taking advantage of such falls under the three categories you mentioned, either desperate or think they can beat the returns.
I am LIGHT STREAM loans Service Lender, we are a legit, registered and guaranteed loan company and we give out loans to individuals, companies, government establishments, churches and business organizations and people of all sorts. Are you in need of a loan for any purpose? Are you in a financial problem? Do you need financial solution?.LIGHT STREAM loans Service is the solution to all your financial problems, our loans are easy, cheap, and quick. Contact us today for that loan that you desire, we can arrange any loan to suit your budget at only 3% interest rate. If interested, contact us immediately via email,([email protected])
Packers and Movers Pune Provide High Quality ***Household Shifting, Home/Office Relocation, Insurance, Packing, Loading, ###Car Transportation Service Pune and High experiences, Top Rated, Safe and Reliable, Best and Secure Packers and Movers Pune Team List. Get ✔✔✔Affordable Rate Charts and Compare Quotation and Save Money and Time @ Packers And Movers Pune
HAVE YOU LOST YOUR MONEY TO BINARY SCAMMERS OR ANY ONLINE SCAM WHATSOEVER?, HAVE YOU BEEN IN SEARCH FOR GENUINE HACKER'S ONLINE?. WELL, YOU HAVE FOUND REDEMPTION IN ASORE CORP.
Asore Corp is a Russian based group of multinational Hacker's, an affiliate of Evil Corp. We have mutual interests obliged to fight online scam and scammers in general. In doing this, we make sure by all means necessary that our clients get the best of services on a��PAYMENT AFTER JOB IS DONE BASIS��️. This means we accept workmanship fee after your job is done.
⚠️ BEWARE OF FRAUDSTARS
if you have been a VICTIM, contact us via:
✅ [email protected]
Having been on various headlines since 2004 hitherto, Asore Corp hosted a conference in August 2006 tagged "The Hacker's profile", which was anchored by Morgan Marquis Boire a high profiled Hacker at Microsoft as the guest speaker. Also, Asore Corp have acquired a hall of fame well deserved for solving tedious puzzles shocking the internet countless times. We possess highly qualified hackers recruited and registered under the right agencies.
Without any reasonable doubts, it is no news that Asore Corp offer one of the best Hacking services world wide.
Amongst others, services we offer are listed as follows :
��bank accounts loading
��social media hack, (Facebook, Instagram, snapchat etc)
��Credit card top up,
��Credit card dept clearing.
��database hack,
��money transfer,
��Verified Paypal Accounts hack,
��email hack,
��College score upgrade ,
��Android & iPhone Hack
��BinaryOption funds recovery.
Also,
�� WEBSITE HACK
��CLEARING CRIMINAL RECORDS
��COLLEGE GRADE UPGRADE
�� HACKED ACCOUNT RESOLUTION
��STOLEN BITCOIN$
��PHISHING OF BITCOIN ACCOUNT
��LOGIN ERROS
��SCAM DURING BITCOIN TRADINGS
Waste no further time.
CONTACT:
��[email protected]
[email protected]
2020 ©️ Asore Corp.
All rights reserved ®️
I never thought I will come in contact with a real and potential hacker until I knew brillianthackers800 at Gmail and he delivered a professional job,he is intelligent and understanding to control jobs that comes his way
You can message on his number (385) 2501115,
Contact him and be happy
Natural herbs have cured so many illness that drugs and injection can’t cure. I've seen the great importance of natural herbs and the wonderful work they have done in people's lives. i read people's testimonies online on how they were cured of HERPES, HIV, diabetics etc by Dr Edes herbal medicine, so i decided to contact the doctor because i know nature has the power to heal anything. I was diagnosed with Herpes for the past 3 years but Dr Edes cured me with his herbs and i referred my aunt and her husband to him immediately because they were both suffering from Herpes but to God be the glory, they were cured too .I know is hard to believe but am a living testimony. There is no harm trying herbs, Thanks. Write him on WhatsApp on +2348151937428. @dr_edes_remedies deals with
(1)Alzheimer virus
(2)Cancer
(3)HIV
(4)Herpes
(5)Genital warts
(6)ALS
(7)Virginal infection
(8)HPV
(9)Hepatitis
(10)Asthma
Email him on [email protected]
https://dredesherbalhome.weebly.com
Pour remédier aux préjudices financiers subis sur internet, l'Organisme International de Répression Contre la Cybercriminalité (OIRCC) et la Brigade d'enquêtes sur les fraudes aux technologies de l’information (BEFTI) créés par les pouvoirs publics et en collaboration par Interpol mondial sont à la disposition de toute personne victime de toutes formes d'escroquerie sur internet. Contactez-nous directement à l'adresse suivante:
[email protected] / [email protected]
Votre plainte sera immédiatement prise en compte par nos experts et une procédure sera mise en œuvre de l'arrestation jusqu'au remboursement de la somme arnaquée y compris le dédommagement dans certains cas.
Pour remédier aux préjudices financiers subis sur internet, l'Organisme International de Répression Contre la Cybercriminalité et la Brigade d'enquêtes sur les fraudes aux technologies de l’information créés par les pouvoirs publics et en collaboration par Interpol mondial sont à la disposition de toute personne victime de toutes formes d'escroquerie sur internet. Contactez-nous directement à l'adresse suivante:
[email protected] / [email protected]
Votre plainte sera immédiatement prise en compte par nos experts et une procédure sera mise en œuvre de l'arrestation jusqu'au remboursement de la somme arnaquée y compris le dédommagement dans certains cas.
Pour remédier aux préjudices financiers subis sur internet, l'Organisme International de Répression Contre la Cybercriminalité et la Brigade d'enquêtes sur les fraudes aux technologies de l’information créés par les pouvoirs publics et en collaboration par Interpol mondial sont à la disposition de toute personne victime de toutes formes d'escroquerie sur internet. Contactez-nous directement à l'adresse suivante:
[email protected] / [email protected]
Votre plainte sera immédiatement prise en compte par nos experts et une procédure sera mise en œuvre de l'arrestation jusqu'au remboursement de la somme arnaquée y compris le dédommagement dans certains cas.