1. What is the House Loan Payment Formula?

The house loan payment formula calculates the fixed monthly payment required to repay a loan over its term. This is the standard formula used by banks in Singapore for home loan calculations.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (SGD)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Number of monthly payments (loan term in years × 12)
• \( PMT \) — Monthly payment amount (SGD)

Explanation: The formula accounts for both principal repayment and interest charges, with more interest paid at the beginning of the loan term.

3. Importance of Loan Calculation

Details: Accurate loan payment calculation helps borrowers understand their financial commitments, compare different loan options, and plan their budgets effectively.

4. Using the Calculator

Tips: Enter the principal amount in SGD, annual interest rate as a percentage (e.g., 2.5 for 2.5%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the typical loan term in Singapore?
A: Most housing loans in Singapore have terms between 15-30 years, though shorter terms are possible.

Q2: How does the interest rate affect payments?
A: Higher interest rates increase monthly payments significantly over long loan terms. A small rate difference can amount to thousands over the loan period.

Q3: Are there other costs besides the monthly payment?
A: Yes, buyers should also consider property taxes, insurance, maintenance fees, and possible stamp duties.

Q4: What is the Total Debt Servicing Ratio (TDSR) in Singapore?
A: Currently 55% - your total monthly debt obligations (including the new loan) cannot exceed 55% of your gross monthly income.

Q5: Can I make extra payments to reduce interest?
A: Most Singapore banks allow partial prepayments, but check for any prepayment penalties in your loan agreement.