Home buyers come across many home loan calculators in online comparison portals. Do you know the differences? Learn how to use the right calculator for Singapore and choose the right mortgage.
Choosing the right calculator
The right calculators for comparison of Singapore home loans should be localized to our interest rates environment. The suitable calculator should show an amortized schedule breakdown after you input your loan amount, tenor and interest rates for at least the first 5 years. On inputting this data, the amortized schedule is produced in a table for your scrutiny. It should cater for varying interest rates for the initial years, which is unique to Singapore. Unlike in USA where they have 30-year fixed rates.
However the mortgage loan calculator can be confusing to the first time user. So let’s learn the basics.
- Housing loan principal is the first thing to look for in the calculator. If you are taking up a loan for a new property, the principal is the loan amount (purchase price less downpayment). If you are refinancing a property, this is the outstanding amount in your mortgage refinancing housing loan.
- The interest rate determines your monthly payment and can cost you tens to hundreds of thousands of dollars during your loan tenor.
- The tenure is the loan duration, that may extend to 75 years of age or 35 years tenure after refinancing.
- Amortization is the schedule that the mortgage calculator creates to show you your future payments and outstanding loan amount. It also shows you the interest amount you have to pay throughout the housing loan tenure.
- Your monthly payments generated by the mortgage calculator shows its interest and principal portions and thus show you your outstanding principal amount at different housing loan periods. The calculator also gives you a better understanding of the calculation of interest charges. You can see the cumulative interest paid with outstanding amount on your loan at any point of time. While the outstanding principal amount decreases with time, cumulative interest paid increases.
- The monthly installments for your loan are adjusted with the changes in annual interest rates. This lets you learn about all repayments you make towards payment of principal and interest portions of your loan. This is an important feature of home loan calculators that compares the mortgages in Singapore. Many calculators in online mortgage sites or blogs do not cater for changes in annual interest rates, which is not relevant to you.
FindaHomeLoan.co has the Home Loan Calculator for new HDB and Private Properties purchases, as well as the calculator for Refinance Mortgages. Both calculators search for all mortgage rates real-time, calculates the repayments and shows you the breakdown.