“Cheapest” means the lowest interest charged.

Bankers are willing to loan us money for buying houses because that is the most secured collateral. Why bother to settle the loan fast?

The interest rate is only BLR + / – margin = 4% – 5% (in 2013)

I bought adequate life insurance to cover my liability ( including mortgage). Thus, I never bother to settle the housing loan.

When I got extra money, or saving, I always invest it and make sure that they generate more than 5% return per annum.

That means NOW we got the house, plus extra investment. When I die, my wife will also get the house, my investment, and the extra life insurance proceed. If I die young and fail to achieve my financial goal, at least my wife can achieve her financial freedom instantly!


Personal finance author and trainer

    9 replies to "Mortgage is the “Cheapest Debt” You Shouldn’t Settle"

    • […] Mortgage: the cheapest debt […]

    • rob

      I am currently looking at an apartment I wish to buy for own stay. Its within my budget but still a liability. What to do? i have fallen in love with the place.

      • KCLau

        having a place to stay is a necessity. Even though it is a liability, it is still worth to know that you own the place. You can do whatever you want with it.

    • subashini sugumaran

      mostly ppl are being into debt to purchase asset. But in the real thing thats not their asset if they bought for their own accomodation. Its still consider as liability. Actually there are mortgage planner who will know more about the bank interest charges and on.
      You really can save allot form their advise.

    • rob

      cheap debt, costly debt- its still a debt.
      you need to service the mortgage EVERY single month. If you have monthly rental returns, fine. Otherwise it just adds to your liability. Am I right??

      • KCLau


        debt is still debt.
        The difference is whether it is a good debt or a bad debt.

    • LOKE

      I think fixed rate home loan is a better choice if we don’t plan to settle the loan fast. If we are able to settle the loan in around 6 to 10 years, flexible rate home loan will be better.

    • […] OPINION: Undeniably, mortgage loan is the cheapest loan available nowadays. Bankers feel secured because your house will likely appreciate in value over […]

    • […] Mortgage is the cheapest loan. Refinance your mortgage, either to a larger sum, or prolong the term with lower installments per month. It is better to refinance for a higher amount because you can pay off your credit card debt straightaway. If not, try to prolong the term. You will get better cash flow to pay off credit card. […]

Leave a Reply

Your email address will not be published.