Your monthly mortgage payment breakdown in Singapore typically consists of principal, interest, and (for HDB buyers) CPF refunds and related costs, and the easiest way to understand and optimise this is to calculate, compare, and apply through Homejourney’s safe, verified multi-bank platform.
By clearly seeing the split between principal vs interest, how your home loan EMI (equated monthly instalment) changes over time, and how different banks structure their amortization schedule, you can choose a loan that fits your cash flow and long-term goals—without jumping from bank to bank.
This article is a focused extension of our main guide, Understanding Your Monthly Mortgage Payment Breakdown in Singapore | Homejourney Guide Understanding Your Monthly Mortgage Payment Breakdown in Singapore | Homejourney... . For a full 360° view of Singapore home loans, including HDB vs bank loans, regulations, and advanced strategies, refer to that pillar guide.
What Exactly Is in Your Monthly Mortgage Payment?
In Singapore, your monthly mortgage (your home loan EMI) is generally made up of four main components:
- Principal – The portion that pays down the amount you borrowed.
- Interest – The cost of borrowing, based on your home loan interest rate and remaining balance.[1]
- CPF vs Cash – How much of the EMI is paid using CPF Ordinary Account (OA) funds versus out-of-pocket cash.
- Insurance / Miscellaneous – For some buyers, this includes fire insurance or mortgage-reducing insurance, usually billed annually but budgeted monthly.
Singapore banks calculate your instalment using an amortisation schedule, meaning each payment is the same (for that rate period), but the proportion of principal vs interest changes over time.[1] Early years are interest-heavy; later years are principal-heavy.
Principal vs Interest: A Simple Singapore Example
Suppose you buy a 3-room HDB resale flat in Queenstown for S$650,000—a realistic figure for a well-located, modernised unit within 8–10 minutes’ walk of Queenstown MRT on the East-West Line.
Assume:
- Loan amount: S$520,000 (80% of purchase price)
- Tenure: 25 years (300 months)
- Interest rate: 2.6% p.a. (for illustration, similar to HDB concessionary rate, though bank loans in 2025 average around 2.5–2.75%[2])
Your approximate monthly payment (home loan EMI) will be around S$2,360–S$2,400. In month 1:
- Interest: ≈ S$1,127
- Principal: ≈ S$1,240
By year 10, with the same rate, a larger share of each payment goes into principal. This is the power of amortisation: as you pay down principal, interest each month shrinks because it’s calculated on a smaller outstanding balance.[1][7]
Insider tip: When I walk clients through their amortisation schedules at kopi sessions around Toa Payoh Central or Tiong Bahru Plaza, the biggest surprise is how much interest they pay in the first 5–8 years. This is why early partial repayments—if you can afford them and your bank doesn’t charge heavy penalties—can save tens of thousands over the full tenure.
How Singapore Banks Calculate Your Home Loan EMI
Most banks like DBS, OCBC, UOB, HSBC, Standard Chartered, and Maybank use a standard amortisation formula based on:
- Principal (loan amount)
- Annual interest rate (fixed or floating, often pegged to 1M or 3M SORA)[2][6]
- Tenure in years / months
The EMI formula (for reference) is:
\( EMI = \dfrac{P \times r \times (1+r)^n}{(1+r)^n - 1} \)
Where \(P\) is principal, \(r\) is monthly interest rate, and \(n\) is number of months.
You don’t have to do this math manually. Homejourney’s mortgage calculator at Mortgage Rates (also accessible via our bank rates page Bank Rates ) does this instantly, showing you:
- Estimated monthly instalment (home loan EMI)
- Principal vs interest breakdown per month
- Total interest paid over the loan tenure
Local context: As of 2025, average bank mortgage rates hover around 2.5–2.75% p.a. for typical owner-occupied loans, after peaking over 4% in 2022.[2] MAS projects the overnight rate to stabilise at relatively lower levels into 2026, supporting more affordable mortgages.[1]
Singapore Regulations That Shape Your Monthly Payment
Beyond the headline rate, three key rules affect your monthly EMI:
1. Loan-to-Value (LTV)
For bank loans, the maximum LTV is usually 75% for borrowers without existing housing loans, subject to age and property tenure.[2][3] The higher your LTV, the higher your monthly EMI, since you’re borrowing more.
2. Mortgage Servicing Ratio (MSR)
The MSR caps your monthly housing instalments (for HDB flats and ECs) at 30% of your gross monthly income.[4] This directly constrains your maximum EMI and therefore your maximum loan size.
3. Total Debt Servicing Ratio (TDSR)
The TDSR caps total monthly debt repayments (including housing, car loans, credit cards, etc.) at 55% of gross monthly income, as set by MAS.[4] Exceeding this cap will lead to a smaller approved loan, translating into a more modest property or higher downpayment.
Homejourney safety advantage: Before you commit to any Option to Purchase in hot areas like Bishan, Bukit Merah, or Pasir Ris, use Homejourney’s mortgage eligibility calculator at Mortgage Rates to check your MSR/TDSR and avoid over-committing.
Why Understanding Your Payment Breakdown Matters
Breaking down your EMI gives you three powerful advantages:
- Cash flow planning: If you’re budgeting for kids’ tuition at NUS/SMU in future or planning to change jobs, you need to know exactly how much of your monthly cash and CPF goes into the mortgage.
- Refinancing decisions: When you see how much interest you’re still paying in years 6–10, you can decide if refinancing to a lower rate via Homejourney makes sense.
- Risk management: If you choose a floating SORA package, you need to know how a 0.5–1.0% rate increase would impact your monthly payment.
For a deeper dive into optimising your breakdown for better approval odds, see Mortgage Payment Breakdown: Boost Approval Odds | Homejourney Mortgage Payment Breakdown: Boost Approval Odds | Homejourney and our Monthly Mortgage Payment Breakdown & Bank Rate Guide Monthly Mortgage Payment Breakdown & Bank Rate Guide | Homejourney .
Step-by-Step: Applying for a Home Loan via Homejourney
Here is a simple, realistic end-to-end journey—from browsing flats in Punggol to getting your multi-bank offers through Homejourney.
Step 1: Estimate Your Budget and Monthly EMI
- Go to Homejourney’s bank rates page Bank Rates .
- Use the mortgage calculator Mortgage Rates to input property price, loan amount, tenure, and a trial interest rate.
- View your estimated monthly instalment and the principal vs interest breakdown.
Pro tip (local insight): If you’re eyeing a new launch in Lentor, Tampines, or Dairy Farm, always test a slightly higher interest rate (e.g., 0.5–1.0% above current) to stress-test your EMI. This reflects realistic fluctuations in SORA-based packages.[2][6]
Step 2: Check Eligibility (MSR, TDSR, LTV)
- Use Homejourney’s eligibility calculator
References