I was reading the Straits Times Forum where the author describes introducing 50 year housing loan as being “imaginative”, and as a “daring to be different” move.
I beg to differ with the author.
Though, stretching a loan to 50 years, makes the monthly instalment more affordable, it also reduces the payer, to a mere debt slave to the said banking institution for life.
It is a profitable proposition for the bank, as they earn lucrative interest for 50 years. But for Singaporeans, it is indeed pitiful to pay so much and for so long on something that you will not own. It doesnt mean that you can afford the instalments now, you can afford the instalments later.
Stretching a loan beyond your retirement years is also dangerous. There will be additional expenses that you need to take care off like, medical etc2 when you retire.
To sum it all, I will only advice my clients to tailor their loan repayment period to the age they want to retire. If you are 30 years old, and you want to retire at 60, at most, you should just consider a 30 year housing loan.
Do not overcommit yourself because what you plan today, you will reapt it in the future.
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