Almost everyone aspires to own property and purchase a home. To achieve this goal, most people work tirelessly and save up.
But even after putting in a lot of effort and saving up, buying a home can be challenging.
Buying a home in Singapore can be a daunting task, especially when it comes to figuring out the finances. One of the most important things to consider is the housing loan monthly installment, which is the amount of money you will need to pay back to the bank each month.
This article will guide you through calculating your monthly installment in Singapore and help in understanding how much loan you can borrow, what a mortgage repayment is, and how to calculate housing loan monthly installment.
How Much Loan Can You Borrow For Your New Home?
When buying a home in Singapore, you must know how much loan you can borrow.
The maximum loan amount you can borrow in Singapore for your new home depends on several factors, including income, credit score, property value, outstanding debts, and loan-to-value (LTV) ratio.
The LTV ratio is the measure of how much you can obtain to fund your house. For instance, an LTV ratio of 75% indicates you can get up to 75% of the price or value of your property, whichever is less.
The Cash Over Valuation (COV) is the term for the difference when a property is sold for more than it is worth.
The highest LTV for HDB Concessionary Loans is 80%, lowered from 85%. Cash, your CPF Ordinary Account (OA), or a combination of both, is used to pay the remaining 20%.
The maximum LTV for bank loans is 75%. A minimum of 5% should be paid in cash, with the remaining 20% being paid using a combination of cash and your CPF OA.
Be aware that LTV ratios calculated by a property loan calculator in Singapore vary depending on the lender you get your loan from rather than the kind of property you’re buying.
What Is A Mortgage Repayment?
Mortgage repayment is the amount you will need to pay back to the lender each month. The total sum you borrow, the loan length, and the interest rate can all affect how much you have to pay back on your mortgage.
The interest rate can vary depending on the type of loan you choose and the lender you are borrowing from.
Note that the interest rate can change over time, affecting your monthly repayment amount. Use a monthly repayment loan calculator to help determine the repayment amount.
How Much Mortgage Payment Can You Afford?
Before applying for a housing loan, it is essential to determine how much mortgage payment you can afford. It will depend on your income, outstanding debts, and credit score. Generally, your mortgage should be 2.5 times your gross annual salary.
Use a Singapore mortgage loan calculator to get the amount you can borrow. For instance, if your yearly income is $100,000, a mortgage in the range of $200,000 to $250,000 would be acceptable. But keep in mind that this is just a general recommendation.
You can use a mortgage repayment calculator to determine how much you can pay each month based on your income and other financial obligations.
How To Calculate Housing Loan Monthly Installment
When it comes to how to calculate housing loan monthly installment in Singapore, you can use the following formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where: M = monthly installment, P = loan amount, i = monthly interest rate (annual interest rate divided by 12), n = loan tenure (in months)
Example: Loan amount: $300,000 Annual interest rate: 2% Loan tenure: 25 years (300 months)
i = 2% / 12 = 0.017 M = 300,000 [ 0.017(1 + 0.017)^300 ] / [ (1 + 0.017)^300 – 1 ] = $1,527.23
Note that this is a rough estimate, and monthly installments may vary based on factors such as loan type, interest rate, and other charges.
There are various ways how to calculate your monthly installment in Singapore housing loan. One of the most common methods is to use a mortgage calculator.
A mortgage calculator can help you determine your monthly repayment based on the loan amount, interest rate, and loan tenure. Other calculators are available online, such as a CPF and a housing loan calculator in Singapore, that can help determine your monthly repayment amount.
How To Use A Mortgage Calculator
A mortgage calculator is a simple tool that can help you determine your monthly repayment amount. A repayment mortgage calculator in Singapore can be used to calculate home loan repayments.
Here are the steps to use one:
- Enter the loan amount: This is the total amount you are borrowing for your home.
- Enter the interest rate: This is the interest rate the lender offers for the home loan. It is calculated using a home loan calculator in Singapore.
- Enter the loan term: This is the number of years you want to repay the loan.
- Enter the downpayment: This is the amount of money you are putting down as a deposit.
- Select the type of loan: There are different home loans available in Singapore, such as HDB loans, private property loans, and refinancing loans.
- Calculate the repayments: Once you have entered all the necessary information, click on the “Calculate” button to estimate your monthly repayments.
- Review the results: The mortgage calculator will show you the estimated monthly repayments, total interest paid over the loan term, and the total amount paid back to the lender. It is vital to note that the results provided by a mortgage calculator are only estimates and may not be accurate.
Be Clear About How To Calculate Housing Loan Monthly Installment In Singapore
Calculating your housing loan monthly installment in Singapore can be a complex process. Still, it can be made easier with the help of various tools like CPF loan calculator, monthly installment calculator, mortgage calculator, and more.
It is important to know how to calculate housing loan monthly installment, how much loan you can borrow, understand what a mortgage repayment is, and determine how much mortgage payment you can afford before applying for a housing loan.
Using these calculators and understanding the factors that affect your monthly repayment, you can make a more informed decision about buying a home in Singapore.
It is crucial to seek professional advice from a bank or financial institution to estimate your monthly repayments accurately.
A mortgage repayment calculator in Singapore can be helpful, but it is best to use it as a rough guide. Always remember that the interest rate, taxes, and other costs can change over time and that mortgage calculators are not always accurate.
At Lending Bee, you can get a quick and easy quote for your housing loan. Apply for a loan now for your dream home or contact us for more details.
Frequently Asked Questions
What Is A CPF Loan Calculator?
A CPF loan calculator is a tool provided by the Central Provident Fund (CPF) Board that can help you determine how much you can borrow based on your CPF savings.
What Is A Loan Repayment Calculator Or Monthly Repayment Loan Calculator?
A loan or monthly repayment calculator is a tool that can help you determine your monthly repayment amount based on the loan amount, interest rate, and loan tenure.
What Is A Monthly Installment Calculator?
A monthly installment calculator is a tool that can help you determine your month repayment amount.
Can I Use A Mortgage Calculator To Determine My Monthly Repayment Amount?
Yes, a mortgage calculator can help you determine your monthly repayment based on the loan amount, interest rate, and loan tenure.
However, it is essential to note that the results provided by a mortgage calculator are only estimates and may not be accurate.
About Ashley Sim
Calling herself a “professional multi-tasker”, Ashley worked as a relationship manager in a bank for five years. She left her job just before the pandemic happened and became a freelance writer for about a year. Now, she’s making the most of her love for writing and knowledge of the banking and financial industry in her role as a content marketing lead. She hopes to help people make better financial decisions through her content and campaigns.
