HDB Loan vs Bank Loan: Which Should You Choose?
The interest rate isn't the whole story. Compare stability, flexibility, and total cost before you sign.
lightbulbKey Takeaways
- HDB loan: fixed 2.6%, 80% LTV, no TDSR — maximum stability
- Bank loan: lower initial rates, but variable — can rise sharply
- You can refinance HDB → bank, but NOT bank → HDB (one-way door)
- For most first-time buyers, HDB loan is the safer choice
Run the Numbers Yourself
Enter property details to calculate your monthly mortgage payment.
Head-to-Head Comparison
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | Fixed 2.6% p.a. | ~2.5–3.5% (variable) |
| LTV Limit | 80% of purchase price | 75% of purchase price |
| TDSR Required | No — exempt from TDSR | Yes — max 55% of gross income |
| Lock-in Period | None | Typically 2–3 years |
| Early Repayment Penalty | None — pay off anytime | 1.5% of redeemed amount during lock-in |
| Rate Risk | Very low — pegged to CPF OA + 0.1% | Higher — tied to SORA/board rates |
| CPF Usage | Full CPF OA for downpayment + repayment | CPF OA allowed, but 5% cash downpayment required |
| Refinancing Flexibility | Can refinance to bank anytime | Cannot switch back to HDB loan |
When to Choose Which
The HDB concessionary loan charges a fixed rate of 2.6% p.a., pegged at 0.1% above the CPF Ordinary Account interest rate of 2.5%. This rate has remained remarkably stable since 1993. With an 80% LTV, you need only a 20% downpayment — and you can pay that entirely from your CPF OA. There's no TDSR requirement, no lock-in period, and no early repayment penalty.
A bank loancan make sense if you have high income, plan a shorter loan tenure, or are comfortable with interest rate risk. Banks may offer initial rates around 2.5–3.0%, but these are typically floating rates tied to SORA (Singapore Overnight Rate Average) or the bank's internal board rate. When SORA rises, your monthly repayment rises too.
Use our LTV Calculator to see how much you can borrow under each scheme, and the TDSR Calculator to check if a bank loan is even feasible based on your existing debts.
The critical point: you can refinance from HDB to bank at any time if rates drop. But you can never go back from bank to HDB. This asymmetry means starting with an HDB loan preserves maximum flexibility.
account_balanceHDB Concessionary Loan
Fixed 2.6% p.a. interest rate. Up to 80% LTV. No TDSR restriction. No lock-in period. No early repayment penalty. Full CPF OA usage for downpayment and monthly repayment.
trending_upBank Floating Rate
Variable rates around 2.5–3.5%, tied to SORA or board rate. Up to 75% LTV. TDSR of 55% applies. Typically 2–3 year lock-in with early repayment penalties. 5% cash downpayment required.
swap_horizThe One-Way Door
You can refinance from HDB loan to bank loan at any time. But you can never refinance from bank loan back to HDB loan. Starting with HDB preserves your options.
Frequently Asked Questions
Should I take an HDB loan or bank loan for my flat?expand_more
What is the HDB concessionary interest rate in 2026?expand_more
Can I refinance from HDB loan to bank loan?expand_more
What is TDSR and how does it affect my loan?expand_more
How much more do I pay with HDB loan vs bank loan?expand_more
menu_bookSources
- HDB — HDB concessionary loan terms and eligibility conditions. hdb.gov.sg
- MAS — Total Debt Servicing Ratio (TDSR) framework and property loan regulations. mas.gov.sg
Related Calculators
LTV Calculator
Calculate the maximum loan amount based on your property value and LTV ratio.
TDSR Calculator
Check if your total monthly debt obligations meet the 55% TDSR limit.
HDB Affordability Calculator
Find out how much HDB flat you can afford based on your income and savings.