Should you pay off the home loan or put your cash in FD?

Target readers: All Investors;  Income Group: Average – Above Average

In life we have many options and decision to make and it’s the same for our adventure in property investment.

When we make some good money from property investment, often time we have few options to explore and need to make a final decision with the money.

Here’s a scenario I’d like to open for discussion and let our readers to choose the option and tell me your reason.


  1. You are serving a home loan RM400,000 for 30 years with 4.6% interest rate. Monthly installment is about RM2,000 and with a tenant paying RM1,500 rental per month.
  2. You suddenly earned RM300,000 cash from selling another investment property. Hurray!
  3. You are earning RM8,000 per month salary and have about RM50,000 in saving account. The monthly income is used mainly to serve the home loan of your house (own stay).

Pick an Option:

Option A

Put the RM300,000 cash into Fixed Deposit and earn about RM1,000 interest every month. Use the interest gain to reduce the burden of the RM2,000 monthly installment.

Option B

Use the RM300,000 to hunt and buy for another good rental property. Risk taker you are.

Option C

Use the RM300,000 to pay for the principal of the RM400,000 home loan thus reduce the total bank interest and tenure.

Option D

Invest the RM300,000 in stock and other high risk but high return investment method.

Option E

Break the RM300,000 into 3 pieces and use it for a) Buy another house b) FD and c) Stock or other.

Option F

Buy a Mercedes Benz.

Which choice will you make? 

In future blogs, I will share some new concepts in terms of how we can manage our home loan better and maximize our investment return.

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