1. What is the Property Loan Payment Formula?

The property loan payment formula calculates the fixed monthly payment required to repay a loan over a specified term. This is the standard formula used by banks in Singapore for property loans (mortgages).

2. How Does the Calculator Work?

The calculator uses the property loan payment formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan term, calculating a fixed payment that covers both principal and interest each month.

3. Importance of Loan Calculation

Details: Understanding your monthly payments helps with financial planning and ensures the loan is affordable. It also helps compare different loan offers.

4. Using the Calculator

Tips: Enter the principal amount in SGD, annual interest rate in percentage, 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 property loans in Singapore have terms between 15-30 years, with a maximum of 35 years or until age 65, whichever is shorter.

Q2: How does interest rate affect payments?
A: Higher interest rates increase both monthly payments and total interest paid. A small rate difference can significantly impact total cost over long terms.

Q3: Are there other costs besides the monthly payment?
A: Yes, property loans in Singapore typically include insurance, legal fees, and possibly mortgage stamp duty.

Q4: What's the difference between fixed and floating rates?
A: Fixed rates stay constant for a period (1-5 years), while floating rates change with market conditions. This calculator assumes a fixed rate.

Q5: Can I pay off my loan early?
A: Most Singapore banks allow early repayment but may charge a penalty (typically 1.5% of redeemed amount) during the lock-in period.