Pension or cash for your deposit: which should you use?

If you have both savings and a pension balance, you have a choice. Neither is always right.

The case for pledging pension

• Your cash stays free: for takaful or insurance, fees, furniture and an emergency fund. Moving in costs more than the deposit.
• A possibly lower rate: HDFC charges 10.42% with pension pledged against 11% without.
• Your pension keeps earning while it is pledged.
• It's money you couldn't otherwise use until 55 or 65.

The case for paying cash

• Your retirement savings stay out of the loan. If things go wrong, your pension is untouched.
• You stay eligible regardless of age rules. The pension route needs you under 60 and able to repay before 65.
• No paperwork with a third party.

Five questions to decide

1. Do you have an emergency fund of at least six months' payments after the deposit? If not, pledging pension and keeping cash is usually safer.
2. Does your lender give a better rate for a pension-backed loan? Get both quotes.
3. How secure is your income? The less certain it is, the more a pledge puts your retirement at risk.
4. How close are you to 65? The nearer you are, the less time to recover from a loss.
5. Is the flat off plan? A long build means a longer time before you can live in it or let it. Keep cash in hand for that period.

Combining the two

Lenders count equity from more than one source. Maldives Islamic Bank, for example, accepts cash, pledged pension and payments already made to the developer towards its 10%. You might pledge part of your pension and pay the rest in cash.

What we suggest asking for

From each lender, in writing:

• the rate with and without a pension pledge;
• the equity it requires;
• how pledged pension is released when the loan ends.

Pension Office: hotline 1441, Viber 733 1441, info@pension.gov.mv, pension.gov.mv. Your pledgeable amount is on your RSA statement, in the Pension mobile app and on the website.

From the Maldives Pension Administration Office's own housing pages, FAQ and leaflet, read on 18 October 2026. Your lender's terms decide the rest; confirm them before you commit. General information, not financial advice.