Interest rates difference?

[sheiwah]

Hi what is the difference in interest rates if property is bought for own stay versus investment?

Thanks!

[Dennis Ng]

Hi what is the difference in interest rates if property is bought for own stay versus investment?

Thanks!

Hi sheiwah,
most of the banks in Singapore, the packages are exactly the same, with no difference in interest rates.

[Topspin70]

Hi Dennis

I like to know how much of my monthly instalment goes to pay interest and how much goes to principal. How do I calculate that?

On the subject of interest, what's your view on interest free instalment plans offered by credit card companies. Instead of paying out a lump sum I can pay slowly and keep more cash at hand for investment. Sounds like a good deal. Is there a catch?

[Dennis Ng]

Hi Dennis

I like to know how much of my monthly instalment goes to pay interest and how much goes to principal. How do I calculate that?

On the subject of interest, what's your view on interest free instalment plans offered by credit card companies. Instead of paying out a lump sum I can pay slowly and keep more cash at hand for investment. Sounds like a good deal. Is there a catch?

Hi Topspin70,
you can ask my staff or bank staff to show you the breakdown between interest and principal repayment.

On interest free instalment, it is a good deal if you are able to control your spending. But if you cannot, you might end up spending on things you cannot afford.

Basically, the interest is paid by the Merchant, so interest free for consumers. If the merchant does not have any other conditions attached to the interest free instalment payment scheme, then consumers gain.

[wemakebread]

Hi Topspin,

If I am not mistaken, there is usually a small 2-3% processing fee.
It can be borne by the bank (if they offer to convert outstanding balance into smaller monthly repayments) or merchant (if they offer instalment at point of purchase). For this reason, some smaller merchants are unable to offer instalment option and require full payment upon purchase.

For me, I am more conservative towards my investment portfolio.
I tend to offset lump sum of purchases from my cash holding, as if I had already paid the purchase in full. This way, all my investment money are truly spare cash that will not face time pressure.

For example, if I invest in stocks, then I can afford to hold infinite amount of time and liquidate only when I choose to, not because I need the money to settle some bills. Yes I am not leveraging as much on my money, but I have peace of mind to go about my daily life & able to time my investments (both entry and exit) with much lesser stress & emotions.