Most buyers compare properties using monthly instalment. That’s the wrong anchor. The correct question is: how much interest will you transfer to the bank over your holding period (and over the full tenure if you keep it)?
In Singapore, this matters because property is typically a leveraged capital allocation decision. Small rate moves change the total interest number enough to flip “good deal” to “fragile decision”.
Start here (fast path)
This page is an exposure framework. For exact schedules, use a bank amortisation schedule or calculator and stress‑test different rates.
Your monthly payment contains two parts: principal (you’re paying yourself back) and interest (you’re paying the bank). Over long tenures, the total interest paid can be large even if the monthly payment looks “affordable”.
The mental model: interest is the carrying cost of leverage. You are paying for the ability to control an asset with borrowed capital.
Many people accidentally compare the wrong numbers:
If you’re deciding whether to buy now, use a consistent 5‑year window with friction included. Start with the 5-year exposure model.
Rate sensitivity is the silent killer. A 0.5% move can change total interest meaningfully. A 1.0% move can turn a “tight but okay” plan into a fragile one.
Stress-test rule
This is why “can I afford the instalment today” is not enough. You need “can I survive realistic rate movement”.
Don’t treat this as a prediction game. Treat it as risk transfer:
The correct question is: how fragile is my plan to rate moves? If fragile, certainty is worth paying for.
Early repayment reduces total interest and reduces leverage risk. But it also reduces liquidity. The best plan is the one that leaves you resilient.
If you’re buying for investment, also model vacancy and tenant risk: Rental Property Ownership Cost.
It depends on loan size, interest rate path, and tenure. For many purchases, total interest over 25–30 years can be a six‑figure to mid six‑figure number. Stress-test different rates to see the range.
Not necessarily. Lower instalments often come from longer tenure, which can increase total interest paid. Compare total interest and friction over a consistent time window.
It can reduce interest cost and risk, but it reduces liquidity. It tends to make sense when your mortgage rate is meaningfully above your realistic after-risk return and you still keep a strong buffer.
No. Fixed buys certainty. Floating can be cheaper at times but transfers rate risk to you. Choose based on buffer strength and stress-test tolerance.