Monthly repayment on a Singapore renovation loan.
Monthly repayment
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Total interest
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Total repaid
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6x income cap
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Your breakdown
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Renovation loan limits in Singapore
Banks in Singapore offer dedicated renovation loans for HDB and private residential properties. The standard cap is the lower of 6 times your gross monthly income or S$30,000. On a gross income of S$5,000 per month, 6 times is S$30,000, which equals the absolute cap. On a gross income of S$4,000, 6 times is S$24,000, which becomes the binding limit. For households with two incomes, lenders typically use the primary borrowers income for assessment, though some banks allow joint applications that combine incomes. Renovation loans differ from personal loans: they are earmarked for home improvement and lenders may ask for renovation quotes or invoices to disburse funds.
Reducing balance vs flat rate
Unlike car loans which use a flat rate, renovation loans in Singapore are typically priced on a reducing or amortising balance. This means you pay interest only on the outstanding principal each month, not on the original full amount. As you repay, the principal falls and so does the interest charge. The calculator above uses the standard amortising formula, which is the correct method for a reducing-balance loan. The monthly payment is therefore slightly higher in early months relative to the interest portion, and the interest charge falls over time, but each monthly instalment is the same fixed amount throughout the tenure.
Planning your renovation budget
A typical HDB renovation in Singapore costs between S$30,000 and S$60,000 for a 4-room flat, with premium finishes pushing higher. The S$30,000 loan cap covers the lower end but leaves a gap for larger projects. Many homeowners supplement with savings or a personal loan, though the combined unsecured credit will count against the MAS unsecured credit limit of 6 times monthly income. Timing matters: renovation loans taken at key collection mean repayments start immediately, before the flat is occupied. Building a cash buffer of 2 to 3 months of renovation loan repayments before key collection reduces financial stress during the renovation period. Getting firm quotes before borrowing avoids the common outcome of a completed renovation that costs 20 percent more than estimated.