Understanding Your Monthly Mortgage Payment Breakdown in Singapore (Homejourney Definitive Guide)
If you are buying a home or refinancing in Singapore, your monthly mortgage payment breakdown is one of the most important numbers in your life. Yet many homeowners only focus on the monthly amount, without understanding how much goes to principal vs interest, how CPF is involved, or how changes in SORA or loan tenure will affect long-term costs.
This Homejourney guide is written for Singapore home buyers, HDB upgraders and investors who want a clear, practical understanding of how their home loan EMI (monthly instalment) is calculated, how an amortization schedule works, and how to make safer, smarter decisions using transparent data and verified tools.
Drawing on real Singapore examples, current 2025 regulations, and on-the-ground experience of dealing with HDB, banks and lawyers, this guide will help you:
- Understand every component of your monthly mortgage payment
- See exactly how much of your payment goes to principal vs interest over time
- Use CPF, cash and loan structures safely under MAS/HDB rules
- Stress-test your affordability against TDSR/MSR limits
- Compare HDB loans vs bank loans with real numbers
- Use Homejourney tools to compare bank rates, calculate eligibility and apply securely
Important disclaimer: This article provides general education, not personalised financial advice. Loan rules, interest rates and government policies can change. Always verify with HDB, banks and MAS, or speak to a licensed adviser before committing to a loan.
Table of Contents
- Core Concepts: What Is a Monthly Mortgage Payment in Singapore?
- Principal vs Interest: How Your Payment Is Split
- How Monthly Payment (Home Loan EMI) Is Calculated
- Amortization Schedule: How Your Loan Shrinks Over Time
- Singapore Regulations That Shape Your Monthly Payment (TDSR, MSR, LTV)
- HDB Loan vs Bank Loan: Impact on Monthly Instalments
- Using CPF for Monthly Mortgage Payments
- Common Real-World Scenarios (BTO, Resale HDB, Condo, Refinancing)
- How to Read and Use an Amortization Schedule
- Risk Management: Stress-Testing Your Monthly Payment
- How Homejourney Helps You Optimise Your Mortgage Safely
- Frequently Asked Questions (FAQ)
1. Core Concepts: What Is a Monthly Mortgage Payment in Singapore?
1.1 Simple definition
Your monthly mortgage payment is the fixed amount you pay every month to HDB or a bank to repay your home loan. It usually consists of:
- Principal – the portion that reduces your outstanding loan amount
- Interest – the cost you pay to borrow the money
In Singapore, this payment can be made using CPF Ordinary Account (OA) savings, cash, or a combination of both. CPF usage is subject to HDB, CPF Board and MAS rules.[3]
1.2 Why this breakdown matters
Understanding your mortgage payment breakdown helps you:
- See how quickly you are building equity in your home
- Estimate how much interest you will pay over the entire loan tenure
- Decide between shorter vs longer loan tenure
- Assess if refinancing will really save you money
- Plan for life changes – children, job moves, retirement
For example, I often see young couples in Punggol and Sengkang who stretch for a larger 5-room resale flat near the MRT. Monthly instalment looks manageable at first, but once childcare, car loan and elderly parents’ expenses kick in, their total debt servicing becomes very tight. Knowing exactly how much of their instalment is interest vs principal allows them to plan when to refinance or prepay safely.
1.3 Who regulates home loans in Singapore?
Three main bodies affect your monthly mortgage payment:
- MAS (Monetary Authority of Singapore) – sets rules like Loan-to-Value (LTV), Total Debt Servicing Ratio (TDSR) and guidelines for bank lending.
- HDB – regulates HDB concessionary loans, HDB flat eligibility, and payment rules.
- CPF Board – controls how much CPF you can use to pay for housing and when refunds are needed.
These rules interact directly with your monthly payment: how big a loan you can take, how much income must support it, and whether you are allowed to stretch the tenure.
2. Principal vs Interest: How Your Payment Is Split
2.1 Principal vs interest explained in plain English
Think of your home loan as a large sum that you slowly pay back. Every month:
- Principal portion reduces your outstanding loan. This is like moving money from the bank back into your home equity.
- Interest portion is the bank’s earnings. It does not come back to you.
In the early years of your loan, a larger proportion of your monthly payment goes to interest. Over time, as the outstanding loan reduces, more goes towards principal. This is the basis of an amortization schedule.
2.2 Example: $600,000 bank loan for a condo in Tampines
Imagine you buy a 3-bedroom condo in Tampines near Tampines MRT and Our Tampines Hub for $1.2 million. You take a $600,000 bank loan at 2.5% interest, 25-year tenure. (Rates are illustrative; refer to Homejourney’s bank rates page for current figures.)
Your approximate monthly instalment (home loan EMI) is around $2,694. In the first month:
- Interest ≈ 2.5% ÷ 12 × $600,000 ≈ $1,250
- Principal ≈ $2,694 − $1,250 ≈ $1,444
So in Month 1, more than 46% of your payment goes to interest. By Year 10, this ratio shifts significantly in favour of principal.
2.3 Why this split matters when you refinance
Many owners in areas like Bishan, Queenstown or Jurong East refinance after Years 2–3 to secure better rates. But if you refinance too early without understanding how much principal has been repaid, you might extend your loan back to 25 or 30 years and end up paying more interest overall despite a lower monthly amount.
A good rule of thumb: don’t just chase a smaller instalment. Use the principal vs interest breakdown to compare total interest cost over your remaining tenure, and factor in any lock-in penalties or legal subsidies.
3. How Monthly Payment (Home Loan EMI) Is Calculated
3.1 The basic EMI formula
In Singapore, banks and HDB generally use a standard annuity formula to compute your monthly payment:
\( EMI = \dfrac{L \times r \times (1 + r)^n}{(1 + r)^n - 1} \)
- L = loan amount
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of monthly payments (years × 12)
You do not need to calculate this manually. Homejourney provides a built-in mortgage calculator on the bank rates & calculator page that uses this formula to show your estimated monthly instalment and breakdown.
3.2 Featured snippet-style table: Factors that affect your monthly payment
3.3 Worked example: HDB 4-room BTO in Tengah
Assume:
- 4-room BTO in Tengah: purchase price $420,000
- HDB loan at 75% LTV → loan amount = $315,000[1][4]
- HDB loan interest: 2.6% p.a.[3]
- Loan tenure: 25 years
Approximate monthly instalment ≈ $1,430.
In Month 1:
- Interest ≈ (2.6% ÷ 12) × $315,000 ≈ $682
- Principal ≈ $1,430 − $682 ≈ $748
If you and your spouse each contribute $715 from CPF OA, no cash is needed, but you must consider the long-term impact on your CPF retirement savings.
4. Amortization Schedule: How Your Loan Shrinks Over Time
4.1 What is an amortization schedule?
An amortization schedule is a month-by-month table showing:
- Starting principal for each month
- Interest charged that month
- Principal repaid that month
- Ending principal after payment
Banks like DBS provide repayment schedule calculators that generate this breakdown.[5] Homejourney’s calculators similarly show how your balance declines over time.
4.2 Example mini amortization table (first 3 months)
Using the earlier example: $600,000 loan, 2.5% p.a., 25 years, monthly instalment ≈ $2,694.
Notice how the interest portion shrinks slightly every month, while the principal portion grows. This pattern continues throughout the loan.
