Singapore Home Loan Calculator

Home Loan Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

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1. What is the Home Loan Payment Formula?

The home loan payment formula calculates the fixed monthly payment required to fully repay a loan over its term, including both principal and interest components. This is the standard calculation used by banks in Singapore for home loans.

2. How Does the Calculator Work?

The calculator uses the home loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

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 pays off both principal and interest over time.

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 principal amount in SGD, annual interest rate (e.g., 2.75 for 2.75% p.a.), and loan tenure in years. All values must be valid (principal > 0, interest ≥ 0, years between 1-40).

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate in Singapore?
A: As of 2023, rates range from 2.5% to 3.5% p.a. for fixed-rate packages, with floating rates typically pegged to SORA or bank board rates.

Q2: How does loan tenure affect payments?
A: Longer tenures reduce monthly payments but increase total interest paid. Shorter tenures mean higher monthly payments but less total interest.

Q3: Are there other costs besides the monthly payment?
A: Yes, consider property taxes, insurance, maintenance fees, and possible early repayment penalties.

Q4: What is the maximum loan tenure in Singapore?
A: For HDB loans, maximum is 25 years or up to age 65. Private banks may offer up to 35 years or age 70.

Q5: How accurate is this calculator?
A: It provides a good estimate, but actual bank calculations may include small variations due to specific rounding methods or additional fees.