What is the interest for a 3-year loan term on a new launch unit with progressive payment

To determine the interest for a 3-year loan term on a new launch unit priced at $1.4 million in Singapore, you need to consider several factors, including the loan amount, interest rate, and loan tenure.

Loan Amount

For a new launch unit, the typical Loan-to-Value (LTV) ratio is 75% for the first loan and 55% for the second loan, assuming you do not have any outstanding housing loans. For a $1.4 million unit, the loan amount would be:

• $1,400,000 * 0.75 = $1,050,000

Interest Rate

Interest rates in Singapore can vary based on the lender and the type of loan. For example, if you are considering a variable rate loan pegged to the Compounded Singapore Overnight Rate Average (Compounded SORA), the rates could be around 4.34% per annum for the first three years, as indicated by some banks.

Loan Tenure

Since you mentioned a 3-year loan term, it's important to note that this is not a typical loan tenure for a mortgage in Singapore. Mortgage loan tenures can range up to 30 years for HDB flats and up to 35 years for private properties, but a 3-year term is unusually short.

Calculating Interest

Given the short loan tenure of 3 years, the interest component would be significant in the early years. Here’s a simplified breakdown:

- Loan Amount: $1,050,000
- Interest Rate: Assume an average interest rate of 4.34% per annum.
- Loan Tenure: 3 years

Using a mortgage calculator or consulting with a mortgage expert, you would find that the monthly repayments would be substantial due to the short loan tenure. Here is a rough estimate:

- Monthly Repayment: Approximately $31,500 to $32,000 per month for a 3-year loan term.
- Total Interest Paid Over 3 Years: This would be calculated based on the monthly repayments and the outstanding balance over the 3 years. For a rough estimate, the total interest could range between $150,000 to $200,000, depending on the exact interest rate and repayment schedule.

Progressive Payment

For new launch units, progressive payment schemes are common. However, this does not affect the calculation of the interest on the loan itself but rather the timing of when the payments are made.

To get a precise calculation, it is advisable to use a mortgage calculator or consult with a mortgage expert who can provide tailored advice based on your specific situation and the current interest rates offered by banks in Singapore.