How it works
- South Korea: choose equal monthly payment, equal principal or interest-only, with a DSR readout against your annual income. Interest is charged on the outstanding balance and Korean loans commonly run 30 to 40 years.
- United States: the payment is quoted as PITI — principal and interest plus one twelfth of property tax and insurance. With less than 20% down, PMI is added until the balance falls to 78% of the home's value.
- United Kingdom: repayment mortgages pay off both interest and principal, while interest-only mortgages pay interest each month with the full principal due at the end. Stamp duty on the purchase price is shown for first-time and repeat buyers.
- Germany: annuity loans keep the monthly rate constant while the interest share shrinks. A yearly Sondertilgung of up to 5% is common and shortens the loan. Land transfer tax of 3.5% to 6.5% plus notary fees applies on top of the price.
- Japan: flat repayment keeps the monthly amount the same, while equal principal starts highest and falls every month. Group credit life insurance is normally included in the rate, and the completion age is usually capped at 80.
- Australia: P&I loans repay principal and interest, interest-only loans usually run up to five years. A deposit under 20% triggers LMI, which is capitalised into the loan, and transfer duty depends on the state with first-home concessions.
- Canada: every applicant passes a stress test at the higher of the contract rate plus 2% or 5.25%. A down payment under 20% requires mortgage insurance and caps the amortisation at 25 years; accelerated bi-weekly payments clear the loan faster.
- France: amortissable loans repay principal and interest together, while in fine loans pay interest monthly with the principal at maturity. Borrower insurance is added to the payment and the debt service ratio including insurance is limited to 35%.
- Singapore: the loan is capped at 75% of the price. The mortgage servicing ratio for HDB flats is 30% of income, calculated at a minimum 4% stress rate, and buyer's stamp duty is charged on a sliding scale up to 6%.
The formula
M = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1)
- P is the loan amount (price minus deposit), r the monthly rate (annual ÷ 12) and n the number of months.
- Equal principal repays P ÷ n each month plus interest on the balance, so the payment falls over time.
- Interest-only pays P × r every month and the whole principal at maturity.
Tips
- Compare the total interest, not just the monthly payment — a longer term cuts the payment but raises the cost.
- Keep the debt service ratio (annual repayments ÷ annual income) well under the bank limit; Korea caps it at 40% and France at 35%.
- A larger deposit lowers LTV, removes US PMI and Australian LMI, and usually unlocks a better rate in every country.
- Check arrangement fees, early repayment charges and the rate after any fixed period before signing.
Standards and sources
- Korea Federation of Banks — COFIX and loan rates
- Financial Supervisory Service (Korea) — DSR rules
- Freddie Mac — Primary Mortgage Market Survey
- CFPB — What is PITI?
- GOV.UK — Stamp Duty Land Tax
- Bank of England — quoted household interest rates
- Deutsche Bundesbank — consumer credit interest rates
- Verbraucherzentrale — home loan rates and costs
- Flat 35 — housing loan programme
- Housing Finance Agency — group credit life insurance
- Reserve Bank of Australia — lending rates
- Moneysmart (ASIC) — lenders mortgage insurance
- Revenue NSW — transfer duty rates
- OSFI — minimum qualifying rate (stress test)
- CMHC — mortgage loan insurance premiums
- Bank of Canada — posted mortgage rates
- Banque de France — household lending rates
- Service-Public — borrower insurance
- MAS — new housing loan rules (LTV)
- MAS — calculating TDSR
- IRAS — buyer's stamp duty
Last reviewed October 10, 2026
Frequently asked questions
How is the monthly payment calculated?
For an equal monthly payment the standard amortization formula is used: M = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the loan amount, r the monthly rate and n the number of months. Equal principal repays the same principal every month plus interest on the balance; interest-only pays interest each month and the whole principal at maturity.
Why do the results differ by country?
Each country has its own market conventions. Korea offers equal payment, equal principal and interest-only with a DSR limit. The United States quotes a PITI payment with PMI when the down payment is under 20%. The United Kingdom separates repayment and interest-only mortgages and charges stamp duty. Germany uses constant annuity rates with optional yearly extra repayments, Japan offers flat and equal-principal repayment, Australia adds LMI when the deposit is under 20%, Canada applies a stress test and mortgage insurance, France adds borrower insurance under a 35% debt service limit, and Singapore caps the loan at 75% LTV with a 30% servicing ratio.
What is DSR and PMI?
DSR (debt service ratio) is annual loan repayments divided by annual income; Korean banks generally keep it under 40%. PMI (private mortgage insurance) is charged on US conventional loans when the down payment is below 20% and can be cancelled once enough principal is repaid.
Is this financial advice?
No. It is a reference estimate from public formulas and published rates. Actual offers depend on your credit, lender and market; check with your bank before borrowing.