Rental Yield vs Mortgage: Cash Flow Analysis | Homejourney

Rental yield vs mortgage cash flow analysis reveals if Singapore property investments generate positive income after loan payments. In 2026, typical gross yields of 3-4% often turn negative when factoring mortgage costs at 1.4-4%, agent fees, taxes, and maintenance[1][2].

Homejourney prioritizes your financial safety by verifying data and offering transparent tools like our bank rates page to compare DBS, OCBC, UOB, HSBC rates instantly. This cluster dives into tactical calculations for multiple property financing and portfolio financing, linking to our pillar on Singapore investment strategies.

What is Rental Yield vs Mortgage Cash Flow?

Rental yield measures annual rent as a percentage of property value: (Annual Rent / Property Price) x 100. Gross yields in Singapore average 3-4% for premium markets, lower than Asia's 4.93% due to high prices[1][2].

Cash flow analysis subtracts all costs—including mortgage interest, property tax (up to 36% for non-owner-occupied), agent fees (1 month + GST), maintenance, and vacancies—from gross rent. Positive cash flow means rent exceeds expenses; negative signals cash drain.

In Singapore's context, Total Debt Servicing Ratio (TDSR) caps payments at 55% of income, while Marginal Subsidized Rent (MSR) applies to HDB. Use Homejourney's mortgage calculator for instant eligibility checks with Singpass integration.

Singapore Rental Yields in 2026: Real Data

URA data shows non-landed rents up 1.9% YoY in 4Q25, firm outside core regions but slipping 0.5% QoQ[4]. Core Central Region (CCR) yields ~3%, Rest of Central ~3.5%, Outside Central ~4% gross[1].

However, net yields drop to 2-2.7% after expenses. A $1.5M condo renting at $4,200/month yields 3.36% gross, but $92,179 biennial costs (interest $38k, tax, fees) leave $872/month positive flow on $375k downpayment—2.7% ROI[3].

Compare via Financing Multiple Investment Properties in Singapore: Homejourney Guide for several properties loan insights.

Mortgage Rates Impact on Cash Flow

3M SORA fell 188bps in 2025, pulling fixed rates to 1.4%—lowest since 2020[4]. Bank loans from DBS (1.4-2%), OCBC, UOB beat HDB's 2.6% fixed for investors ineligible for HDB financing.

Floating SORA + margin (0.5-1%) suits short holds; fixed for stability. TDSR limits leverage in property empire financing.

The chart below shows recent interest rate trends in Singapore:

As seen, rates stabilize at lows, boosting affordability. View live rates on Homejourney's bank rates page covering HSBC, Standard Chartered, Maybank, CIMB.

Step-by-Step Cash Flow Calculation

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

1. Estimate Gross Yield: ($4,200 rent x 12) / $1.5M price = 3.36%[3].
2. Subtract Mortgage: $1.125M loan at 2% = $18,750 interest/year (use Homejourney calculator).
3. Add Costs: Tax $10k, agent $5k, maintenance $5k, vacancy 5% ($2.5k) = $41k/year total expenses.
4. Net Cash Flow: $50,400 rent - $41k = $9,400/year positive (0.6% net yield).
5. ROI on Equity: $9,400 / $375k downpayment = 2.5%.

For multiple property financing, aggregate TDSR across loans. Apply multi-bank via Homejourney for best rates from 10+ partners.

Positive Cash Flow Strategies for Investors

1. Target Higher Yield Areas: Outside Central (e.g., Punggol, Sengkang) offers 4%+ vs CCR's 3%[1][4]. Search budget-fit properties on Homejourney property search.

2. Optimize Financing: Refinance at 1.4% fixed; use portfolio loans for several properties loan. See Best Bank Loans for Property Investors: Singapore 2026 Guide | Homejourney .

3. Minimize Costs: Self-manage to skip agent fees; claim repairs via CPF. Insider tip: Time leases post-CNY for 10% premium rents in family districts.

4. Leverage Homejourney: One-click applications to DBS-UOB via Singpass auto-fill income/CPF data for fast approvals.

ABSD (60% for 3rd property) erodes yields—read LTV and ABSD for Investment Property: Homejourney's 2026 Guide .

Risks and Limitations

Vacancies spike in slumps (flat 2014-2020)[3]; 2026 softening outside core[4]. Always factor 10% buffer. This is educational—consult Homejourney mortgage brokers or advisors. Rates per MAS/URA Feb 2026[1][4].

Post-purchase, maintain via Aircon Services for value preservation.

FAQ: Rental Yield vs Mortgage Cash Flow

What is a good net rental yield in Singapore?
2-3% after costs; aim 1% above mortgage rate for safety[3]. Use Homejourney calculator.

Can rental cover my mortgage fully?
Rarely in 2026—expect 70-90% coverage. Positive flow needs 4%+ gross[3].

How does TDSR affect multiple properties?
55% income cap across all debts; portfolio financing tightens LTV to 50%[4].

Best banks for investor mortgages?
DBS/OCBC at 1.4-2% SORA-based. Compare on Homejourney bank rates.

Should I buy if yield < mortgage rate?
Only for capital growth; prioritize cash flow for safety.

Master Rental Yield vs Mortgage: Cash Flow Analysis with Homejourney's trusted tools. Start with our bank rates page for multi-bank offers and eligibility checks. For full strategies, see our pillar on Financing Multiple Investment Properties: Singapore 2026 Guide | Homejourney . Build safely with Homejourney.

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 2 (2026)
3. Singapore Property Market Analysis 4 (2026)
4. Singapore Property Market Analysis 3 (2026)