Private rents +0.7%, HDB +0.4%: the landlord maths after tax, maintenance and mortgage

Private residential rents rose 0.7% in 2Q2026 and HDB rents rose 0.4%, with tighter supply and steady tenant demand holding both markets firm despite more completions due this year (Realion, 2Q2026). In the same week, Stacked Homes ranked Singapore's 30 highest-yielding condominiums, deducted property tax, maintenance fees and mortgage repayments, and found that not one of them fully covered its ownership costs.

Those two findings are not in tension. They tell you that gross rental yield, the number quoted in every listing and launch deck, is a marketing figure. The number that decides whether a rented-out condo pays for itself is the monthly instalment, and that is set by your loan structure rather than by the project you pick.

Where the money actually goes

Take an illustrative S$1.6m two-bedder renting at S$4,800 a month. Gross yield is 3.6%, comfortably above what most of the market offers.

Now the outgoings. On a 75% loan of S$1.2m over 25 years at 3.0%, the instalment is about S$5,691 a month. Maintenance at a mid-tier condo runs roughly S$400. Non-owner-occupied property tax starts at 12% of annual value and steps up quickly; on an annual value near the market rent of S$57,600, the bill lands around S$9,100 a year, or S$760 a month (verify current bands against IRAS).

Total: S$6,851 against S$4,800 of rent. A monthly shortfall of S$2,051, on a property most buyers would describe as a strong yield play. Add agent commission amortised over the lease, the odd month of vacancy, and income tax on net rental income, and the gap widens.

Cash-flow negative is not the same as loss-making

The instalment is not an expense. In month one at 3.0%, S$3,000 of that S$5,691 is interest and S$2,691 is principal, which moves from your bank account into your equity.

Strip out the principal and the same property looks different: S$3,000 of interest plus S$400 maintenance plus S$760 tax is S$4,160 against S$4,800 of rent. The tenant covers the true carrying cost with S$640 to spare. What the tenant does not cover is the forced savings component.

This distinction is the whole exercise. If the shortfall is mostly principal, you have a liquidity problem, and the fix is loan structure: rate, tenure, or the amount financed. But if rent does not even cover interest, maintenance and tax, you have a pricing problem, and no refinancing will rescue it. That second case means the property was overpaid for or the rent was overestimated at purchase, and lowering the instalment only slows the bleeding rather than stopping it.

Before touching the loan, do this test on your own numbers: rent minus interest minus maintenance minus tax. Positive, and you are financing an asset. Negative, and you are subsidising one.

Rent growth will not close the gap

At 0.7% a quarter, roughly 2.8% a year compounded, closing a S$2,051 shortfall on S$4,800 of rent requires rent to rise about 43%. That takes close to 13 years of uninterrupted growth at the current pace, on a rental market that fell for several quarters in 2024.

One year of 2.8% rent growth on that unit is worth about S$134 a month. Hold that figure in mind, because it sets the benchmark for everything else.

Three levers, ranked

The rate. On a S$1.2m loan over 25 years, moving from 3.0% to 2.5% cuts the instalment by roughly S$307 a month. That single 50 bps improvement (100 bps equals one percentage point) is worth more than two years of rent growth at the current pace. Moving the other way, from 3.0% to 4.0%, costs about S$643 a month and wipes out five years of rent growth. If you are sitting on a package that reprices this year, that repricing will move your cash flow more than any rental market forecast.

The tenure. Stretching the same loan from 25 to 30 years drops the instalment from S$5,691 to about S$5,060, a saving of S$631 a month. Almost all of that is deferred principal, not saved interest, so the total interest bill rises. The constraint is regulatory: to keep the higher Loan-to-Value (LTV) limit, tenure must not exceed 30 years for private property and the loan must not run past age 65. Breach either and the LTV cap drops sharply.

The LTV. Putting in more equity is the most powerful lever and the most expensive. Financing S$880k instead of S$1.2m over 25 years at 3.0% cuts the instalment to about S$4,173, a saving of S$1,518 a month. But the extra S$320k of cash only earns you the interest you avoid, about 3.0% a year pre-tax. Judge it against what that money would otherwise return, not against the headline monthly improvement.

All three levers reduce the shortfall. None of them fix a unit where rent does not cover interest, maintenance and tax in the first place. Run the test in the section above before you touch rate, tenure or LTV.

What to do with this

Before comparing projects, model the instalment at your actual LTV and tenure, then re-model it 100 bps higher. If the property only works at today's rate, it does not work.

Then run the pricing test: rent minus interest minus maintenance minus tax. If that number is negative, no rate cut or refinance changes the underlying arithmetic. If it is positive, the shortfall you are topping up each month is the forced-savings component, and that is the most negotiable line in the equation.

If you already hold a rented-out property and the shortfall is a liquidity problem, check when your current package reprices, and what you would pay to refinance now. On a S$1.2m loan, 50 bps is worth more than a decade of rental market cooperation.