Answer
Mortgage Total Interest Cost
Everyone looks at the monthly payment. Almost nobody looks at total interest paid over the life of the loan. That number will shock you — and it's the real cost of your mortgage.
Answer: On a $1,000,000 loan at 3.5% over 25 years, you pay $501,736 in total interest — that's $1,501,736 total repaid on a $1,000,000 loan. At 4.0%, it jumps to $583,494. Stretching to 30 years at 3.5% costs $616,578 in interest — $114,842 more than the 25-year option.
Total Interest on a $1,000,000 Loan
Same loan amount, different rates and tenures. Look at how fast the interest adds up.
| Rate | Tenure | Monthly | Total Repaid | Total Interest |
|---|---|---|---|---|
| 3.0% | 25 years | $4,743 | $1,422,852 | $422,852 |
| 3.5% | 25 years | $5,006 | $1,501,736 | $501,736 |
| 4.0% | 25 years | $5,278 | $1,583,494 | $583,494 |
| 3.0% | 30 years | $4,216 | $1,517,580 | $517,580 |
| 3.5% | 30 years | $4,490 | $1,616,578 | $616,578 |
| 4.0% | 30 years | $4,774 | $1,718,695 | $718,695 |
Assumes fixed rate for entire tenure (rates actually reset every 2-3 years). HDB concessionary loan rate: 2.6% fixed.
25 vs 30 Years — The Real Cost of 5 Extra Years
A longer tenure lowers your monthly payment but you pay significantly more overall.
| Rate | 25yr Monthly | 30yr Monthly | Monthly Saving | Extra Interest (30yr) |
|---|---|---|---|---|
| 3.0% | $4,743 | $4,216 | $527 | $94,728 |
| 3.5% | $5,006 | $4,490 | $516 | $114,842 |
| 4.0% | $5,278 | $4,774 | $504 | $135,201 |
You save ~$500/month but pay $95K–$135K more over the life of the loan. That's the price of cash flow flexibility.
How Extra Payments Slash Your Interest
Extra payments go directly to principal, which reduces the base that interest is calculated on. The earlier you pay extra, the bigger the impact.
| Strategy | Interest Saved | Tenure Reduced |
|---|---|---|
| +$200/month from start | ~$45,000 | ~2 years |
| +$500/month from start | ~$99,000 | ~4.5 years |
| +$1,000/month from start | ~$165,000 | ~7.5 years |
| $50,000 lump sum in year 5 | ~$40,000 | ~1.5 years |
| $100,000 lump sum in year 5 | ~$75,000 | ~3 years |
Based on $1,000,000 loan at 3.5% / 25 years. Extra payments assumed to reduce tenure (not instalment). Check with your bank if prepayment penalty applies during lock-in.
Where Your Monthly Payment Actually Goes
In the early years, most of your payment is interest. On a $1,000,000 loan at 3.5%:
| Year | Monthly Payment | Interest Portion | Principal Portion | Balance After |
|---|---|---|---|---|
| Year 1 | $5,006 | $2,917 | $2,089 | $974,932 |
| Year 5 | $5,006 | $2,620 | $2,386 | $872,137 |
| Year 10 | $5,006 | $2,213 | $2,793 | $723,455 |
| Year 15 | $5,006 | $1,696 | $3,310 | $541,789 |
| Year 20 | $5,006 | $1,036 | $3,970 | $318,735 |
| Year 25 | $5,006 | $175 | $4,831 | $0 |
In year 1, 58% of your payment is interest. By year 20, it flips to 79% principal. This is why early extra payments are so powerful.
HDB Loan at 2.6% — How It Compares
If you're on an HDB concessionary loan, the maths is kinder:
| Loan | Monthly | Total Interest (25yr) | vs 3.5% Bank |
|---|---|---|---|
| HDB at 2.6% ($500,000) | $2,274 | $182,167 | — |
| Bank at 3.5% ($500,000) | $2,503 | $250,868 | +$68,701 |
HDB loans have no lock-in and no prepayment penalty. The certainty of 2.6% fixed is worth a lot when bank rates are volatile.
Want to see your actual numbers?
Plug in your loan amount, rate, and tenure — the calculator shows total interest, monthly payment, and how what-if scenarios change the picture.
FAQ
How much total interest do I pay on a $1M mortgage at 3.5% over 25 years?
About $501,736 in total interest. Your monthly payment is $5,006, and you repay a total of $1,501,736. That means you pay roughly 50 cents in interest for every dollar borrowed. This is why even small rate differences matter.
Is a 25-year or 30-year loan tenure better?
A 30-year tenure gives lower monthly payments ($4,490 vs $5,006 at 3.5%) but costs significantly more in total interest ($616,578 vs $501,736 — that's $114,842 extra). Choose 30 years if you need cash flow flexibility, but try to make extra payments when you can.
How much can I save by making extra payments?
On a $1M loan at 3.5%/25yr, paying an extra $500/month from the start saves roughly $99,000 in total interest and shortens your loan by about 4.5 years. Even a one-time lump sum of $50,000 in year 5 saves approximately $40,000 in interest.
Does the interest rate matter more than the loan tenure?
Both matter, but rate has a bigger impact. Going from 3.0% to 4.0% on a 25-year $1M loan adds $160,642 in total interest. Going from 25 to 30 years at 3.5% adds $114,842. Rate shopping and refinancing at the right time can save six figures.
Should I use CPF OA or cash for extra repayments?
CPF OA earns 2.5% risk-free. If your mortgage rate is above 2.5%, using CPF to make extra repayments saves you the rate difference. At 3.5%, that's 1% net savings. But remember: CPF used for housing must be refunded with 2.5% accrued interest when you sell.
How does refinancing affect total interest cost?
If you can refinance from 4.0% to 3.0% on a $800K remaining balance with 20 years left, you save roughly $100,000 in total interest. Factor in legal fees ($2,500-$3,000) and any lock-in penalty (1.5% of outstanding). Usually worth it if the rate difference is 0.5% or more.
Related
- HDB Loan Early Repayment Penalty — $0 for HDB, 1.5% for bank
- Refinance Home Loan Singapore — when switching saves money
- Fixed vs Floating Rate Singapore
- Property Loan Interest Rate 2026 — current rate environment
- Mortgage Lock-In Period Singapore — what triggers penalties
Last updated Feb 2026. Calculations assume fixed rate for entire tenure (actual bank rates reset every 2–3 years). HDB concessionary rate is 2.6%. This is informational, not financial advice.