How To Calculate Housing Loan Monthly Installment In Singapore

Dexter Lee March 3, 2023

How To Calculate Housing Loan Monthly Installment In Singapore

When buying or refinancing a property, you’ll come across a housing loan calculator, also referred to as a mortgage calculator.

Mortgage lenders usually use the calculator to help show the details of a housing loan for borrowers to quickly understand the entire process. The ideal housing loan calculator will help borrowers plan their finances accordingly to ensure they repay the loan easily.

It shows all the payments with an amortised schedule summary.

This article focuses on everything you need to know about mortgage payments and how to calculate housing loan monthly installment in Singapore.

How Much Loan Can You Borrow For Your New Home?

The amount of money you can borrow to buy a property depends on your LTV limit. LTV, or loan-to-value ratio, is the amount one can borrow to finance the purchase of a home.

For instance, if you’re purchasing a HDB flat and looking for a bank loan, you’ll have a 75% LTV limit on the property’s price.

On the other hand, the maximum LTV for HDB Concessionary Loans has been lowered from 85% to 80% as of 30 Sep 2022.

If the home you’re purchasing is priced higher than its value, the difference is known as the Cash Over Valuation (COV).

A bank loan allows you to buy both HDBs and private properties. Since banks use floating interest rates for their home loans, the total charged interest will be lower, and you’ll be debt-free faster.

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    HDB loans are ideal when you’re short of funds as they enable you to cover the down payment using your CPF account with an advance payment of 15% lower. The main downside of an HDB loan is its stringent eligibility criteria based on your familial and income status.

    The Significance Of The LTV Ratio

    The LTV ratio is essential to lenders as it represents the risk amount they take. With that said:

    • A high LTV ratio implies that the loan amount is near the property’s value. Therefore, if a borrower defaults on the loan, the lender might be unable to recoup their losses.
    • A low LTV ratio shows that the lender has a good equity amount in the property. Hence, they’re less likely to lose funds if the borrower defaults.

    What Is the Total Debt Servicing Ratio (TDSR)?

    TDSR measures your ability to service your debt obligations. This makes TDSR one of main Singapore’s loan requirement conditions. It can be used to evaluate the affordability of a new loan and is usually used by lenders when deciding to provide credit.

    A high TDSR shows that the borrower has a high debt burden and could make monthly payments difficult.

    A low TDSR shows that a borrower has a low debt burden showing they’re more likely to afford to make their monthly payments.

    To calculate TDSR in Singapore, you divide your gross monthly income by the monthly debt payments.

    The TDSR is currently capped at 55% of your monthly gross income in Singapore. A Mortgage Servicing Ratio, MSR, is the part of your gross monthly income geared towards repaying all the property loans, including the loan you’re applying for.

    What Is A Mortgage Repayment?

    Mortgage repayment is a home loan type where you repay a section of the capital, the amount you borrowed, with a certain interest per month.

    With a mortgage repayment, you’re guaranteed to have repaid the entire loan by the end of the mortgage term, as long as you stick to your monthly payments. The mortgage term is usually approximately 25 years.

    During the first few years of the mortgage term, a larger chunk of the monthly payment is directed toward the interest, while the smaller portion is towards the capital.

    As time goes on, the balance shifts, with more going towards paying off the loan and less towards interest. You can use a monthly repayment loan calculator to calculate the mortgage repayments. However, the factors determining your mortgage repayments include:

    • The amount you’re borrowing or loan quantum
    • The annual interest rate
    • The number of payments annually (e.g., semi-annual or monthly)
    • The loan tenure
    • The property type
    • The loan type
    • The building status

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    How To Pay Your Mortgage Repayments

    You can either pay your mortgage repayments from your bank or CPF account. For the CPF option, you must set up automated deductions and learn more using the CPF loan calculator. On the other hand, for bank funds, you can select from the:

    • Credit card
    • Manual payment via AXS or SAM machine or bank transfer
    • Through automated GIRO bank transfers, monthly

    You can always gauge your financial situation to repay your mortgage rapidly through lump sum prepayments.

    To get the exact figures and calculate home loan repayments, you can repay; you can use our mortgage repayment calculator in Singapore.

    How Much Mortgage Payment Can You Afford?

    When you take a mortgage loan to buy a property, you’ll be required to repay the home loan monthly over a set period until the principal and the accumulated interest are settled.

    This monthly repayment is commonly known as mortgage repayment. As you continue paying the outstanding loan monthly, the interest decreases over time.

    To determine how much mortgage payment you can afford, it’s advisable to use our repayment mortgage calculator. This gives you the exact figure of the monthly installment funds to repay, depending on the lender.

    How To Calculate Housing Loan Monthly Installment

    It’s possible to calculate your monthly installment by hand, but using our online mortgage calculator is easier.

    A housing loan calculator in Singapore, also known as the Singapore property loan calculator, helps you understand your repayment terms. It lets you know the exact figure of your monthly installment and the total interest payable.

    You’ll need to have your principal mortgage amount, loan term, and monthly or annual interest rate. Also, consider your property taxes, private mortgage, and homeowners insurance. Armed with this information, you’ll just key in the figures in their respective boxes and get your answer within seconds.

    How To Use A Mortgage Calculator

    A Singapore mortgage or home loan calculator is simply a digital tool that estimates your monthly mortgage payment and terms. It’s a free tool that provides personalized loan recommendations and could include things such as:

    • Mortgage length in years
    • Monthly mortgage payments with a breakdown of HOA fees, PMI, homeowners insurance, property tax, principal and interest
    • Fixed or adjustable interest rate
    • Closing costs
    • Interest rate and annual percentage rate (APR)

    To estimate the monthly mortgage payment, you should input details such as:

    • Prince of the potential property
    • Downpayment amount or percentage
    • Property type and location
    • Your other personal information and credit score
    • Monthly taxes, HOA and insurance fees

    Select the factors that matter most to you to find the ideal home loan options. These include:

    • Low interest
    • Lowest monthly payment
    • Short-term ownership

    Benefits Of A Singapore Mortgage Loan Calculator

    • Quick calculations
    • Accuracy
    • Free and unlimited
    • Easy to compare
    • Forecast and schedule
    • Custom-built results
    • User-friendly
    • Detailed analysis
    • Repayment schemes
    • Explore alternatives

    Find The Right Lender

    A Singapore mortgage or home loan calculator is simply a digital tool that estimates your monthly mortgage payment and terms.

    The housing loan calculator shows the details of a housing loan for borrowers to easily understand the entire process.

    The online calculator at CreditMaster will help you plan your finances accordingly to ensure you repay the loan easily and on time.


    Dexter Lee

    Born with a pen in one hand and a keyboard in the other, Dexter's been crafting words into beautiful prose since he was old enough to scribble on his walls (much to his mother's chagrin). He's a self-proclaimed pun master, often leaving his coworkers in stitches with his clever wordplay. He's been known to strike up conversations with strangers and turn their stories into captivating content that keeps readers coming back for more. Despite his unconventional approach to life and work, Dexter takes his job as a content manager very seriously. He knows that every piece of content he produces has the power to make a difference in someone's life, and he's committed to using his words for good.

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