Another excellent question, and also a very subjective one. No right or wrong answer, really depends on your comfort and affordability. Also taking in consideration your lifestyle, children's school fees, tuition, car loan, credit card etc. So every individual will give a different opinion on this subject matter.
But let me breakdown for you so you can make up your own mind on this. I'll split the comparison between Bank loan and HDB loan as well.
Lets assume we take a loan amount of $300k
HDB Loan
For 25 yrs tenure
Monthly Instalment = $1,361
Total Accrued Interest = $108,303
For 15 yrs tenure
Monthly Instalment = $2,015
Total Accrued Interest = $62,614
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Bank Loan
For 25 yrs tenure
Monthly Instalment = $1,200
Total Interest = $59,943
For 15 yrs tenure
Monthly Instalment = $1,862
Total Interest = $35,201
So, as you can see from the illustration above, taking a shorter 15 years tenure and paying more monthly, you will definitely save a lot on the interest.
In my opinion, if you can afford it, paying more monthly but on a shorter tenure is better, as you can save more from the huge interest. But of course, this again bows down to your lifestyle as we have other commitments elsewhere to.
Do you think it's worth the savings? Share your thoughts on our forum.
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