Rental Yield vs Mortgage: Cash Flow Analysis | Homejourney

Rental yield vs mortgage cash flow analysis determines if your Singapore investment property generates positive cash flow after loan payments. Homejourney helps investors compare rental yield (typically 3.36% nationally) against mortgage rates (1.35%-2.40%) to ensure profitability while prioritizing safety and trust.

This cluster article dives into tactical cash flow calculations for investment property loans, linking back to our pillar guide on Singapore property investment financing. Use Homejourney's bank rates page to compare best bank property investor options like DBS, OCBC, and UOB in real-time.

What is Rental Yield vs Mortgage Cash Flow?

Rental yield measures annual rental income as a percentage of property value, while mortgage cash flow assesses if rent covers loan repayments plus expenses. In Singapore, gross yields average 3.36% for apartments, with highs of 3.60% in Hougang/Punggol/Sengkang[1]. Compare this to current investor mortgage bank rates: fixed at 1.55%-2.40% or floating SORA + 0.25%-1% (around 1.65%-2.30%)[1][5].

Positive cash flow occurs when net rental income exceeds mortgage payments. Homejourney's mortgage calculator at https://www.homejourney.sg/bank-rates#calculator lets you input property details for instant analysis, using Singpass for verified CPF and income data.

Singapore Rental Yields: Current Data (2026)

Average gross yields stand at 3.36%, up slightly from 2024[1]. Breakdown: 1-bedroom units yield ~3.36% (rent USD 2,740/month), 2-bedroom ~3.36% (USD 3,520), 3-bedroom ~3.36% (USD 4,930). Prime areas like Alexandra/Commonwealth hit 3.51%[1].

Convert to SGD: Expect S$4,000-S$7,000 monthly rent for a S$1.5M condo. But use net yield: Subtract property tax (4-16% of annual value), maintenance (S$300-500/month), and vacancy risks[3]. Insider tip: Hougang units near Kovan MRT (Exit A, 5-min walk) offer stable tenant demand from families, boosting rentability over yield-chasing fringe areas.

Mortgage Rates for Investment Properties

For second property loans, banks like DBS, OCBC, UOB, HSBC, and Standard Chartered offer competitive packages. Lowest fixed rates start at 1.35% (Year 1, loans >S$1M), floating from 1M SORA +0.25% (~1.36%)[5]. HDB loans at 2.60% are pricier, pushing investors to banks[1].

Floating suits rental property mortgages due to rental offsets against rate hikes[5]. Check https://www.homejourney.sg/bank-rates for live comparisons across 10 banks, including cash rebates (S$2,000-S$2,800 for refinancing)[5].

SORA rates have fallen to 3-year lows, boosting lending by 15.3% in 2024[1]. The chart below shows recent interest rate trends in Singapore:

As shown, declining SORA favors investors, but TDSR (60% debt cap) and ABSD (17% for third properties) apply. See our LTV & ABSD Guide for Singapore Investment Properties | Homejourney ">LTV & ABSD Guide.

Cash Flow Analysis: Step-by-Step Calculation

Follow these actionable steps for Rental Yield vs Mortgage: Cash Flow Analysis:

Calculate Gross Yield: (Annual Rent / Property Price) x 100. Example: S$60,000 rent on S$1.5M condo = 4%.
Net Rent: Subtract 20-30% for taxes/maintenance/vacancy = S$43,200/year[3].
Mortgage Payment: For S$1.2M loan (80% LTV) at 2% over 25 years: ~S$5,300/month (S$63,600/year). Use Homejourney calculator.
Cash Flow: Net Rent - Mortgage - Other Costs. Here: Negative S$20,400/year initially.
Break-Even: Need 4.2% net yield to cover 2% mortgage + expenses.

Real example: S$1.8M Punggol condo (3.60% yield[1]), S$5,500 rent/month. Net ~S$4,500 after costs. 70% loan (S$1.26M, Additional Buyer's Stamp Duty compliant) at 1.5% = S$5,000/month payment. Slight negative flow, but appreciation offsets. Search similar on https://www.homejourney.sg/search.

Key Factors Beyond Yield vs Rate

Rentability Trap: High yield areas may have low tenant demand (e.g., 99-year lease expiry units)[3]. Prioritize MRT proximity (e.g., Sengkang Grand Plaza, 3-min walk from MRT).
Rate Risks: Floating rates change monthly; rents yearly. Current low SORA may rise[3].
TDSR/MSR: Rental income counts 70% toward serviceability (MAS rules).
Best Banks: For investors, UOB offers sale penalty waivers[5]. Review Best Bank for Property Investors Singapore 2026 | Homejourney ">Best Bank for Property Investors and UOB Home Loan Review 2026: Complete Guide by Homejourney ">UOB Review.

Disclaimer: This is educational; consult Homejourney Mortgage Brokers for personalized advice. Rates as of Feb 2026[1][5].

Actionable Tips for Positive Cash Flow

1. Target 4%+ gross yields in growth areas like Punggol. 2. Lock fixed rates via Homejourney bank-rates (Singpass auto-fill). 3. Factor ABSD in second property loan costs. 4. Refinance HDB to bank loans for 0.6-1% savings[1]. 5. Track SORA on Homejourney; apply multi-bank with one click.

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FAQ: Rental Yield vs Mortgage Cash Flow

Q: Is 3.36% yield enough for positive cash flow?
A: Rarely gross; aim for net > mortgage rate +2%. Use Homejourney calculator for your scenario.

Q: Best bank for property investors?
A: Compare DBS/OCBC/UOB on https://www.homejourney.sg/bank-rates. UOB suits flippers with waivers[5]. See Who Should Choose UOB Home Loan: Complete Review | Homejourney ">UOB guide.

Q: How does TDSR affect investment loans?
A: Caps total debt at 60% income; 70% rental counts. Exceeding? Downsize loan.

Q: Fixed or floating for rentals?
A: Floating for income buffer[5]. Lock 2-3 years if rates rise.

Q: When to refinance?
A: If bank rate < HDB 2.60% or better package. Homejourney simplifies multi-bank apps.

Master Rental Yield vs Mortgage: Cash Flow Analysis with Homejourney for trusted, verified insights. Start at our bank rates page or pillar guide on investment financing. Your safe property journey begins here.