Reducing Your Housing Loan
One way to reduce the amount of interest charged on your housing loan is to reduce your principal amount as quickly as you can. This also helps you to settle your loan faster, or if you choose to, reduce your monthly payment. The choice is yours: reduce your repayment period and save on interest payment; or reduce your monthly payment and have a bit more to spend every month. You can also work out with the bank to have a bit of both. Of course this is subject to any conditions imposed on the loan. Some corporate loans (loans obtained through your employer), for example, do not allow borrows to change the monthly payment amount. Regardless of your preferences, EPF allows members to withdraw part of their savings for this purpose. This is either to reduce the member’s own housing loan or that of his/her spouse’s. Withdrawal for reducing a housing loan is applicable once a year, one year after the original withdrawal (for buying or building a house) was made. The subsequent withdrawals are only applicable to the same loan. Should you refinance the house, withdrawal to reduce housing loan is only applicable to the original balance of the original loan. |
