Monthly Instalment Calculator

How the monthly instalment is calculated

Singapore home loans use standard reducing-balance amortization. Each month you pay interest on the outstanding balance plus a portion of principal, so the split shifts over time even though the payment itself stays flat for as long as the rate is fixed. The formula is:

M = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1], where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly instalments (tenure in years × 12).

Worked example

Take an $800,000 condo bought with 25% down. The loan is $600,000 at a 3.00% package rate over a 30-year tenure (n = 360 months, r = 0.25% a month). Plugging into the formula gives a monthly instalment of $2,530. Over the full 30 years you'd pay roughly $910,800 in total, of which about $310,800 is interest — more than half the loan amount again, purely from spreading repayment over three decades.

What changes the result

• Loan tenure — stretching from 25 to 30 years lowers the monthly instalment but adds years of extra interest; shortening it does the opposite.
• Interest rate or package type — fixed packages hold the instalment steady during the lock-in; floating SORA-pegged packages move with the market every month or quarter.
• Loan-to-value and down payment — a larger down payment shrinks the loan principal, which lowers the instalment directly.
• Property type — HDB loans cap tenure at 25 years and the rate at 2.6%; private and EC bank loans can stretch to 30 years but face the 4.0% stress test for eligibility.

Common mistakes to avoid

• Forgetting that the instalment shown assumes the rate never changes — check the reversion rate after your lock-in ends.
• Ignoring the 4.0% stress test, which limits how much you can actually borrow even if the real instalment looks affordable.
• Leaving out Buyer's Stamp Duty, legal fees and valuation costs, which need to be paid on top of the down payment.
• Assuming CPF can cover 100% of the instalment indefinitely — usage is capped by your OA balance and the property's CPF withdrawal limit.

For a full picture of what you can afford before shopping for a unit, start with the mortgage loan calculator, then check your TDSR and, if it's an HDB flat, run the numbers through the HDB loan calculator to compare against a bank package.