HDB Loan Interest Rate Trends Analysis
The HDB loan interest rate remains steady at 2.6%, pegged 0.1% above the CPF Ordinary Account rate, while bank mortgage rates for HDB flats have dropped to 3-year lows below 2%, making banks more attractive in 2026.
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Current HDB Loan Interest Rate Trends
The HDB concessionary loan rate is fixed at 2.6% p.a., a floating rate technically linked to CPF OA but stable for over a decade. This provides predictability for first-time HDB buyers.
However, as of late 2025 into 2026, bank rates have fallen sharply. Three-month SORA hit 1.34%, the lowest in three years, driving floating bank loans to around 1.55%-1.8%. Fixed options from DBS/POSB start at 1.6%-1.7% for 2-3 years, with no early repayment penalties.
This gap has spurred refinancing: DBS saw POSB HDB loan uptake rise 13x year-on-year. More HDB owners are switching, saving up to S$500 monthly on a typical loan, like Ms Denise Chan's repricing to 1.6% from 3%.
The chart below shows recent HDB loan interest rate trends alongside SORA and bank packages:
As seen in the chart, rates dipped post-2023 highs above 3.6%, with further declines expected if US Fed cuts continue and SGD stays strong. Refinancing peaked but may moderate mid-2026 as lock-ins end.
HDB Loan vs Bank Loan: Key Comparison for 2026
Deciding between HDB loan vs bank loan? HDB offers stability at 2.6% with 90% LTV (80% for second properties) and lenient approvals, ideal for risk-averse buyers. Banks cap at 75% LTV but now offer lower rates: 1.55%-1.8% vs HDB's 2.6%.
| Feature | HDB Concessionary Loan | Bank Mortgage HDB |
|---|---|---|
| Interest Rate | 2.6% (stable) | 1.55%-1.8% (fixed/floating) |
| LTV Limit (First Property) | 90% | 75% |
| Downpayment | 10% (CPF/cash) | 25% (5% cash min) |
| Switch Back? | N/A | No return to HDB |
Which loan better HDB? Banks win on cost now, but HDB suits if you prioritize stability—no volatility, easier eligibility. Note: Switching to banks is irreversible.
SORA and Bank Rate Breakdown
SORA (Singapore Overnight Rate Average) replaced SIBOR as the benchmark. 3M SORA at 1.34% powers floating loans (e.g., 3M SORA + 0.25% = ~1.6%). Fixed rates from DBS (1.6%), OCBC, UOB (1.55%-1.7%) compete fiercely.
- Floating Pros: Lower now, potential further drops; flexible conversions.
- Floating Cons: Volatility if rates rise.
- Fixed Pros: Certainty for 2-3 years; e.g., POSB 1.7% saves S$3,600/year on S$400k loan.
- Fixed Cons: Higher reset risk post-lock-in.
Track live 3M/6M SORA on Homejourney's bank rates page for real-time updates.
Actionable Decision Framework: Which Loan for You?
Assess your risk tolerance:
- Low Risk: Stick with HDB 2.6%—no surprises, higher LTV.
- Medium Risk: Bank fixed 1.6%-1.7% for savings with short lock-in.
- High Risk: Floating SORA packages for lowest rates.
Steps to decide:
- Check lock-in end date and fees (legal ~S$2k-3k for refinance).
- Use Homejourney mortgage calculator for payments.
- Compare on Homejourney: DBS, OCBC, UOB, HSBC, etc.
- Apply via Singpass—one form, multi-bank offers.
- Consult Homejourney brokers for personalized advice.
Insider tip: Time refinancing when SORA dips below 1.4%, as in Punggol BTO upgraders saving S$400/month on 4-room flats. Always verify eligibility under TDSR/SSR.
This cluster builds on our pillar HDB Loan vs Bank Loan 2026 Comparison | Homejourney ">HDB Loan vs Bank Loan 2026 Comparison for full coverage. Related: HDB Loan Documents: Complete Checklist for 2026 | Homejourney ">HDB Loan Documents Checklist.
FAQ: HDB Loan Interest Rate Trends
What is the current HDB loan interest rate?
2.6% p.a., pegged 0.1% above CPF OA—stable since 2004.
Are bank loans cheaper than HDB now?
Yes, at 1.55%-1.8% vs 2.6%, but floating rates carry volatility risk.
Can I switch back from bank to HDB loan?
No, it's one-way—plan carefully.
How does SORA affect my payments?
Falling 3M SORA (1.34%) lowers floating loans; track on Homejourney.
Best time to refinance HDB loan?
Now, if lock-in ends—save S$3k+ yearly, but factor fees.
Disclaimer: Rates fluctuate; not financial advice. Consult professionals. Data from HDB, MAS, banks as of 2026.
Ready to compare? Visit Homejourney bank rates for live HDB loan interest rate trends analysis, calculators, and secure Singpass applications. Search HDB flats at Homejourney property search within your budget—trust starts here.
