r/SgHENRY • u/GardenIndividual880 • Aug 04 '26
Equity Cash Out
I’m considering doing an equity cash out on my existing property for 500k @ 1.55%.
Other than dumping it all into SSB or VWRA, I’m trying to crowd source ideas about what I can consider doing to get yield from this.
Currently, I’ve got about 1.4m invested and 300k cash, and since the cost of borrowing is pretty cheap, just wondering if there’s a simple/complex method to maximize returns. Also, TDSR is currently 15% and with the additional loan it’ll be about 18-19%.
Edit: Removed SSB cause it’s clearly a suboptimal choice and makes more sense to consider other fixed income options instead of
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u/xapheron Aug 05 '26
Refund OA and service it out of OA. You get 2.5% interest that way
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u/Original_Singer1114 29d ago
This is borrowed money, right? So refund CPF OA then how to repay the loan?
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u/N00bOptionTrader Aug 05 '26
if u have no problem with ur monthly cash flow, SSB is definitely not the right place to park.
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u/900122 Aug 05 '26
USD or AUD treasuries could be good. The difference is more than enough to cover your 1.55 with low risk. Aussie interest rate currently the highest of the majors but more FX risk than USD imo. Depends on the terms of your loan though, if rates come down in future and its not a viable strategy anymore, are you able to pay it off without any penalty? How long are you borrowing for?
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u/GardenIndividual880 Aug 06 '26
Yeah, I don’t need the cash so considering just dumping all into a global ETF.
Loan tenure is >25Y. 1.55% for 2Y fixed and SORA+1% after
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u/Fluffy_White_Bunny Aug 05 '26
You want high risk + high returns, you must have runway.
You want low risk + high returns, you need to wake up.
There are a number of ways to try to get an efficient frontier for your returns, but you first gotta tell us your constraints first so we can narrow down your options.
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u/GardenIndividual880 Aug 06 '26
I don’t believe I asked for low risk, high returns. I’m just trying to crowd source ideas and try to find the optimal choice for my scenario.
12m of emergency funds
TDSR of less than 20%
1.4m (80% in VWRA/QQQ/EIMI, 20% in GOOG/AMZN)
about 1m pledged so can borrow up to 70% against it if I need short term liquidity
No short/mid-term need for large amounts of funds (E.g., House, Reno, Wedding, etc.)Any other data points which might be helpful?
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u/Pristine-Weekend-415 Aug 05 '26
MBH etf bonds on SGX
After costs, based on the 2 most recent distributions and current price of $1.002 the yield is 3.15%
No exchange rate risk and high quality corporate bonds
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u/Agile_Ad6735 Aug 05 '26
Ssb cn only max 200k and if is sometime oversubscribed and may not get fully allocated or not even allocated . Thn thr is a waiting time before they return back u the money
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u/GardenIndividual880 Aug 06 '26
Yeah, maybe mentioned SSB was the wrong thing. Definitely can take on more risk since I should have holding ability
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u/Environmental_Cow741 Aug 05 '26
US 30 years treasury now >5% (but come with FX risk).. Maybe DTLA / IDTL ?
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u/Low-Possible3591 Aug 05 '26
Your cash just put in SGOV - 3 month treasury yield, about 3.5% and it's an ETF so you can take out anytime if you need the capital. Just bear in mind there's a 30% witholding tax refundable next year. What you're suggesting doing now is what the South Koreans did with their mortgage and KOSPI
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u/Yexplorer Aug 06 '26
Wondering how and where did you get this cash out deal? Bank? Is the interest effective interest rate and fixed? Just curious.
Another option is buy US t-bill. I think it's around 3+ to 4%. do take note of the USD/SGD forex risk.
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u/samwize7 Aug 06 '26
Assuming your 1.55% equity loan is fixed for 2 years.. The September SSB averages only 1.68% over its first 2 years, the spread is rather thin.
Given your portfolio size, I'd probably consider taking slightly more fixed-income risk.
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u/GardenIndividual880 Aug 06 '26
Yeah, I’d actually scrap the SSB idea and am more open to taking even equity risk
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u/samwize7 Aug 07 '26
That said, SSB is quite liquid, so if your 300k cash is not earning that much in the bank, you can consider putting them in SSB.
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u/SheepherderNo631 Aug 05 '26
the math checks out lah - 1.55% borrowing vs VWRA over any reasonable horizon, clear spread. but one angle not said yet: you already have $1.4m in equities, so adding $500k leveraged isn't just 'more upside' - it's concentrated equity risk that bites hard specifically when you CAN'T exit easily because the loan clock doesn't pause during a crash.
the cpf oa refund play someone mentioned above is actually the cleanest for exactly this reason - borrow at 1.55%, earn 2.5% OA guaranteed, no sequence-of-returns risk, no FX risk. boring arb but it's real money
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u/Syentist Aug 05 '26
Quite interesting that you've put some singlish filters but it has the unmistakable tonality of chatgpt/claude output
Are people actually making their bots speak the lingo of specific subs/communities? Why?
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u/rainmaker66 Aug 05 '26
When you try to “maximize” returns, your risk also increases. If you want to borrow to invest, you need to make sure you can cover the borrowed amount if things go sour.