Rainbow on FI

Given today’s relatively lukewarm interest rates and high market valuations, I decided to deploy my spare cash towards a CPF housing refund. A couple of years ago, I bought a 5-room resale flat as a single (most of my friends and relatives probably thought I was nuts —except for my property agent, of course). I financed it using partial cash, all of my CPF OA and maximum HDB mortgage. The plan is to hold it for 5–10 years and eventually downgrade to a 2-room Flexi BTO flat for retirement. When I sell my flat in future abode downgrade (or right-size as the government might put it), the portion of the flat financed using CPF will need to be refunded to my CPF OA account with accrued interest. In other words, it’s not just about returning the principal amount withdrawn —it’s about returning the principal plus 2.5% annual accrued interest to CPF. That effectively reduces the cash proceeds I’ll receive upon selling the flat. The Snowball Effect of Accrued Interest The impact becomes clearer...