Rental Yield vs Mortgage: Cash Flow Analysis | Homejourney
Rental yield vs mortgage cash flow analysis reveals whether Singapore investment properties generate positive cash flow after loan repayments. At Homejourney, we prioritize your safety and trust by verifying data from official sources like URA and MAS, helping investors make confident decisions.
This cluster article dives into tactical cash flow calculations for property investment financing, linking back to our pillar guide on Property Investment Financing Complete Guide Singapore. Use Homejourney's bank rates page to compare real-time rates from DBS, OCBC, UOB, and more.
What is Rental Yield vs Mortgage Cash Flow?
Rental yield measures annual rental income as a percentage of property value, typically 3-3.5% for Singapore private properties in 2025.
Gross rental yield = (Annual rent / Property price) x 100. For a $1.5M condo renting at $4,000/month ($48,000/year), yield is 3.2%.
Mortgage cash flow subtracts monthly loan repayments, maintenance, and taxes from rent. Positive cash flow occurs when rent exceeds costs; negative requires topping up. Singapore's Total Debt Servicing Ratio (TDSR) caps debt at 55% of income, impacting investment property loans.
Homejourney's mortgage calculator at https://www.homejourney.sg/bank-rates#calculator lets you test scenarios instantly with Singpass integration.
Singapore Rental Yields in 2025-2026
Average gross yields fell to 3.29% in Q1 2025, with highs in Alexandra/Commonwealth (3.69%) and Hougang/Punggol/Sengkang (3.56%), lows in Orchard/River Valley (3.09%). HDB yields are lower but stable.
Private rents: 1-bed $2,558 USD (~S$3,450), 2-bed $3,488 USD (~S$4,700), 3-bed $4,651 USD (~S$6,270) monthly. OCR areas like Punggol offer better yields for buy to let mortgages.
Insider tip: Check URA's property market data for latest rents near MRT stations like Punggol (5-min walk to yields >3.5%). Homejourney verifies listings on our property search for trusted options.
Current Mortgage Rates for Investors
Fixed rates: DBS 2.50% (2-year lock), UOB 2.85% (2-year). Floating: 3M SORA +0.60% (~3.0% total).
For rental property financing, floating suits investors as rents offset hikes. Investment loans have higher rates (0.2-0.5% above owner-occupied) and LTV limits (50-60% vs 75-80%). See our guide on Best Bank Loans for Property Investors.
The chart below shows recent interest rate trends in Singapore:
Rates stabilized post-2024 declines, with new loans up 15.3%. Compare DBS, OCBC, UOB, HSBC, Standard Chartered via Homejourney's bank rates page.
Cash Flow Analysis: Step-by-Step Calculation
Follow these actionable steps for Rental Yield vs Mortgage: Cash Flow Analysis:
- Estimate annual rent: Use URA data; e.g., $4,500/month ($54,000/year) for 2-bed OCR condo.
- Calculate gross yield: ($54,000 / $1.6M) x 100 = 3.38%.
- Loan details: 60% LTV ($960K loan, 25 years, 3% rate). Monthly repayment ~$4,600 (use Homejourney calculator).
- Deduct costs: Maintenance $300/month, property tax $250/month, vacancy 5% ($225/month).
- Net cash flow: Rent $4,500 - Repayment $4,600 - Costs $775 = -$875 (negative; top-up needed).
For positive flow, target yields >4% or low-LTV loans. HDB investors: MSR limits apply if owner-occupied elsewhere.
Real Singapore Example: Punggol Condo
$1.4M 2-bed unit, rent $4,200/month (3.6% yield). $840K loan (60% LTV, Maybank 2.8% fixed). Repayment $4,000/month. Costs $500. Cash flow: +$200/month positive.
ABSD for investors: 60% on value above $1.8M (SC/PR higher). Link to LTV & ABSD Guide for details. CPF usable for downpayment/stamp duties.
Decision Framework: When Yields Beat Mortgage Costs
- Positive cash flow: OCR/HDB, yields >3.5%, high LTV floating loans.
- Neutral/negative: CCR luxury (yields <3.2%), fixed rates for stability.
- Break-even point: Yield must exceed mortgage rate + 1% (costs/vacancy).
Homejourney's multi-bank application submits to DBS, UOB, HSBC via one form with Singpass for fast approvals.
Risks and TDSR/MSR Considerations
TDSR: Total debt ≤55% income. Investors stress-test at 4% rate. Multiple properties? See Financing Multiple Properties Guide.
Disclaimer: This is educational; consult Homejourney mortgage brokers or advisors. Rates as of Jan 2026; MAS regulates fairness.
FAQ: Rental Yield vs Mortgage Cash Flow
1. Is 3.3% rental yield good in Singapore?
It's average; aim >3.5% in OCR for positive flow post-mortgage. Use Homejourney's projects directory for yield estimates.
2. How does SORA affect investor mortgages?
Floating rates track SORA (~2.8% + spread). Chart above shows stability; fixed better for negative yield gaps.
3. Can I use CPF for investment property loans?
Yes, for repayment (up to accrued interest), but ABSD in cash. Calculate via our tool.
4. What's better for cash flow: HDB or condo?
HDB lower yields but stable rents; condos higher potential in Punggol/Sengkang.
5. How to apply for investor mortgages safely?
Via Homejourney's bank-rates page: Compare, calculate, apply to multiple banks securely with Singpass.
Master Rental Yield vs Mortgage: Cash Flow Analysis with Homejourney for trusted, verified insights. Start at our bank rates page or pillar guide for full property investment financing strategies. Prioritizing your safety in every decision.
