Capital preservation vs Capital appreciation.

Now that I have purchased my own home, both my wife and I are deeply in debt (hahaha)

It's in a nice location really near our workplace and is considered really near town, think walking distance. According to the widely practiced financial calculations it is within range of the 3: 3: 5 calculations. (although is more to the higher end) We opt to kept our downpayments low to hoard cash and max out borrowings at 1.95% for two years. This gives us both arbitrage of 0.55% via our CPF and with the amount of money we have there is overall savings.

Some friends asked and I thought i should pen down my thought process. Why Bank Loans?
Reason is simple, if the USA raises the interest rates in the long term the CPF board will adjust accordingly. Just because the interest is stuck at 2.6% for the last 10 plus years doesnt mean it wouldnt happen. I did a bit of historical checks and thought that might be the case. Also with the current rates we saved around 0.55% for two years.

I have also sold my current flat and the proceeds should be in by end of this year. based on what I have now i am inclined to have 50% locked up in some low risk bonds (AAA if possible) but non of the options I have could give me near 3%. You need at least 250k a pop for the really good products.