1. What is Home Loan Eligibility?

The Home Loan Eligibility Calculator determines the maximum loan amount you can qualify for based on your affordable monthly payment, interest rate, and loan tenure. It's particularly useful for Singapore's property market where loan eligibility is strictly regulated.

2. How Does the Calculator Work?

The calculator uses the present value of annuity formula:

Where:

• \( P \) — Maximum loan amount (principal, SGD)
• \( PMT \) — Affordable monthly payment (SGD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (years × 12)

Explanation: The formula calculates the present value of a series of future payments (annuity) considering the time value of money.

3. Importance of Loan Eligibility Calculation

Details: Understanding your maximum loan amount helps in property budgeting and ensures you don't overcommit financially. In Singapore, this is crucial due to TDSR (Total Debt Servicing Ratio) requirements.

4. Using the Calculator

Tips:

• Enter your comfortable monthly payment (typically ≤30% of your income)
• Use current bank interest rates (typically 2.5-3.5% in Singapore)
• Standard loan tenures are 25-30 years (maximum 35 years for younger borrowers)

5. Frequently Asked Questions (FAQ)

Q1: What is TDSR and how does it affect my loan?
A: TDSR (Total Debt Servicing Ratio) limits your total debt repayments to 55% of your gross monthly income in Singapore.

Q2: Are there additional costs to consider?
A: Yes, include property taxes, maintenance fees, and insurance (typically adds 10-15% to monthly costs).

Q3: How does loan tenure affect eligibility?
A: Longer tenures increase eligibility but result in higher total interest paid.

Q4: What's the typical interest rate in Singapore?
A: Currently 2.5-3.5% for HDB loans and 1.5-2.5% for bank loans (2023 rates).

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual bank approvals may vary based on credit score and other factors.