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Members who take an HDB housing loan have the option of retaining up to $20,000 in their Ordinary Account (OA), with the remainder going towards their housing payment.
Members taking a bank loan can choose to retain any amount in their OA, and we recommend you retain at least $20,000.
These savings can provide a safety net and earn risk-free interest.
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Ben and Lexie are looking to take up a home loan. These are the assumptions that apply to both:
The maximum loan that can be taken: $470,000
Based on their respective decisions on the amount to retain in their Ordinary Account, their outstanding loans and monthly instalment are as follows:
With an approximate increase of $200 per household on the monthly instalment, Ben and his family enjoy better financial security, where they have enough OA to cover at least 15 months of housing repayments in times of hardships.
*Assumption: Initial OA balance: $20,000, interest rate is at 2.6% and the number of years for loan repayment is 20 years
**Assumption: The total monthly instalment is divided between 2 co-owners