Monthly repayment and total interest.
Monthly repayment
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Total interest
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Total repaid
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Worked example
Take a S$700,000 home loan at 3.5 percent a year over a 25 year tenure, the kind of bank loan many Singapore buyers take after the 25 percent down payment. The standard amortising formula gives a monthly repayment of about S$3,504. Over 25 years that is 300 monthly payments, so the total repaid is roughly S$1,051,309.
Of that total, S$700,000 is the principal you borrowed and about S$351,309 is interest. In other words you pay back the loan plus roughly half as much again in interest across the full term. Each early payment is mostly interest and only a little principal, which is why refinancing or making partial prepayments in the first years saves the most. A shorter tenure raises the monthly figure but cuts total interest sharply.
| Item | Amount |
|---|---|
| Loan amount | S$700,000 |
| Monthly repayment | S$3,504 |
| Total interest | S$351,309 |
| Total repaid (300 months) | S$1,051,309 |
How it is calculated
The monthly repayment uses the standard amortising loan formula. The annual rate is divided by 12 to get a monthly rate, and the tenure in years is multiplied by 12 to get the number of payments. The payment is set so that the loan, plus interest charged each month on the shrinking balance, is cleared exactly at the end of the term. Total interest is simply the sum of all payments minus the original loan. In Singapore, bank loans float with SORA while HDB concessionary loans sit at 0.1 percent above the CPF Ordinary Account rate, currently 2.6 percent, so the rate you enter should match your actual package. Borrowers must also pass the TDSR and, for HDB or EC flats, the MSR limits.