HDB Loan Interest Rate Trends 2026: Homejourney Analysis
The HDB loan interest rate remains fixed at 2.6%, pegged at 0.1% above the CPF Ordinary Account rate, offering stability for Singapore homebuyers. However, in 2026, bank loans from DBS, OCBC, and UOB have dropped below this level to as low as 1.55%-1.7% p.a., driving a surge in refinancing from HDB loans.[1][3][4]
This HDB Loan Interest Rate Trends Analysis reveals why more HDB owners are switching, with bank rates hitting 3-year lows due to falling SORA benchmarks. At Homejourney, we prioritize your safety and trust by verifying live rates daily on our bank rates page, helping you make confident decisions.
HDB Concessionary Rate Explained: The 2.6% Benchmark
The HDB concessionary rate of 2.6% is a fixed rate, calculated as CPF OA rate (currently 2.5%) plus 0.1%. This provides predictability, shielding borrowers from market volatility—ideal for first-time HDB buyers under Total Debt Servicing Ratio (TDSR) rules.[4][2]
Unlike floating bank rates tied to SORA, the HDB rate hasn't changed in years, making it a safe choice for risk-averse families. However, with bank fixed rates now at 1.6% (e.g., DBS POSB HDB loan), the gap has widened, saving S$500 monthly on a typical loan.[1][8]
Insider tip: HDB loans allow 80% LTV and 10% downpayment (split cash/CPF), versus banks' 75% LTV. Check eligibility via Homejourney's mortgage calculator before deciding.[2]
Current Trends: Bank Rates Beat HDB's 2.6%
In early 2026, HDB vs bank loan rate comparisons show banks winning: DBS offers 1.55%-1.7% fixed for 3 years (no early repayment penalty), OCBC saw 60% more HDB switchers in 2025.[3][1]
Rates have fallen as 3-month SORA hit 1.34%—lowest in 3 years—due to US Fed cuts and low inflation. Fixed loans are popular (90% of HDB refinancers choose them for budgeting certainty).[3]
The chart below shows recent interest rate trends in Singapore, tracking SORA and key bank packages against the HDB 2.6% line:
As visible, bank rates dipped below HDB levels in late 2025, with projections holding at 1.3%-1.4% SORA by year-end.[3]
SORA Deep Dive: Impact on Floating Bank Loans
SORA (Singapore Overnight Rate Average) is the key benchmark replacing SIBOR, with 3-month compounded SORA at ~1.34% p.a. Banks add a spread (e.g., SORA + 0.25% = 1.59%).[3][6]
3M vs 6M SORA: Shorter 3M resets quarterly for quicker rate drops; 6M offers slight stability but lags falls. On a S$400k loan (30 years), dropping from 3% to 1.6% saves S$3,600 yearly—covering a family trip.[3]
Track live 3M/6M SORA on Homejourney's bank rates page, updated daily for precise timing.
Fixed vs Floating: HDB vs Bank Loan Comparison
| Feature | HDB Loan (2.6% Fixed) | Bank Fixed (1.6%-1.8%) | Bank Floating (SORA+) |
|---|---|---|---|
| Rate Stability | Lifetime fixed | 1-3 years, then floating | Market-linked |
| Current Effective Rate | 2.6% | 1.55%-1.7% | 1.6%-1.8% |
| LTV Max | 80% | 75% | 75% |
| Switch Back? | N/A | No to HDB | No to HDB |
| Best For | Risk-averse | Budget certainty now | Expecting further drops |
[Data from HDB, DBS, OCBC 2026][1][3][2] Note: Switching from HDB to bank is irreversible.
2026 Outlook: Will Rates Stay Low?
Experts predict modest further declines if SGD stays strong, but bulk drop already happened. Refinancing peaks mid-2026 as 2023 lock-ins end.[3]
Cash rebates (S$2,000-S$2,800) from DBS/OCBC sweeten deals. For HDB upgraders, bank loan better now, but assess volatility risk.[6]
Decision Framework: 5 Steps to Choose
- Calculate Savings: Use Homejourney's mortgage calculator for your loan size.
- Check Lock-in: Refinance only post-lock-in to avoid fees.
- Assess Risk: Fixed for stability; floating if rates fall more.
- Compare Banks: DBS (1.6%), OCBC, UOB, HSBC on Homejourney bank rates.
- Apply Smart: One-click via Singpass on Homejourney—get offers from all partners instantly.
Disclaimer: Rates fluctuate; consult Homejourney Mortgage Brokers for personalized advice. This links to our pillar HDB Loan vs Bank Loan 2026 Comparison | Homejourney ">HDB Loan vs Bank Loan 2026 Comparison for full coverage.
FAQ: HDB Loan Interest Rate Trends
Is the HDB loan rate always 2.6%?
Yes, fixed at 2.6% (CPF OA + 0.1%), unchanged for stability.[4]
Are bank loans better than HDB's 2.6% rate now?
In 2026, yes—rates at 1.55%-1.7% save significantly, but can't revert to HDB.[1][3]
What is SORA and how does it affect payments?
SORA is the benchmark; 3M SORA + spread sets floating rates. Track on Homejourney.[3]
Can I refinance from HDB to bank?
Yes, but one-way—ideal if your lock-in ends. See HDB vs Bank Loan Rates 2026: Complete Comparison Guide ">HDB vs Bank Loan Rates 2026.[3]
How to compare rates safely?
Use Homejourney's verified bank rates page for DBS, OCBC, UOB, and more—no risk, full transparency.
Ready to save? Visit Homejourney bank rates to compare, calculate, and apply via Singpass today. Pair with our property search for HDB flats in your budget. Trust Homejourney for safe, verified property journeys.
