HDB Loan Interest Rate Trends Analysis
The HDB concessionary loan rate remains fixed at 2.6% p.a. (CPF Ordinary Account rate + 0.1%), offering stability for Singapore homebuyers, while bank HDB loans have dropped to 3-year lows around 1.55%-1.7%, making refinancing attractive.[1][3][4]
This cluster article dives into HDB Loan Interest Rate Trends Analysis, providing actionable insights for first-time buyers and upgraders. It connects to our pillar guide on Singapore HDB financing (HDB Loan vs Bank Loan 2026 Comparison | Homejourney ">HDB Loan vs Bank Loan 2026 Comparison), helping you navigate rates safely with Homejourney's trusted tools.
Current HDB Loan Rates: Fixed at 2.6% vs Bank Trends
HDB loans provide a predictable 2.6% p.a. rate, pegged to the CPF OA rate (currently 2.5%) plus 0.1% spread, shielding borrowers from market swings.[1][2][4] This suits risk-averse buyers like first-timers purchasing a 4-room BTO flat in Punggol for S$500,000, where stability trumps volatility.
Bank HDB loans, however, are now lower: DBS/POSB offers 1.55%-1.7% for 3-year fixed (no early repayment penalty), OCBC and UOB around 1.6%-1.8% floating on 3M SORA + margin.[1][3][8] As of February 2026, 3M SORA is ~1.34%, down from 3.6% in 2023, driving a refinancing surge—DBS POSB HDB uptake up 13x YoY.[1][3]
Insider tip: For Tengah or Woodlands resale flats (~S$600k), switching saves ~S$500/month on S$400k loans, but note you can't revert to HDB loans later.[1][3]
SORA Deep Dive: Impact on HDB Loan Trends
SORA (Singapore Overnight Rate Average) is the key benchmark for floating bank HDB loans, replacing SIBOR by end-2024. 3M Compounded SORA at 1.34% (Oct 2025 low) + bank margin (0.2%-0.5%) yields effective rates of 1.55%-1.8%.[3][4]
Trends show SORA falling with US Fed cuts and low Singapore inflation; expect 1.3%-1.4% by end-2025, potentially extending into 2026.[3] For a S$500k HDB loan over 25 years, a 1% drop saves ~S$350/month.
The chart below shows recent interest rate trends in Singapore, highlighting SORA movements and HDB benchmarks:
As seen, rates hit 3-year lows, prompting HDB owners to refinance—volumes up 35-40% YoY like 2019-2020.[3] Track live 3M/6M SORA daily on Homejourney's bank rates page.
Fixed vs Floating HDB Loans: Comparison Table
Choose based on risk tolerance: Fixed locks rates 1-3 years; floating follows SORA for potential savings but with volatility.
| Feature | Fixed Rate (e.g., DBS 3Y 1.7%) | Floating (3M SORA + Margin) |
|---|---|---|
| Current Rate | 1.55%-1.8%[1][3] | 1.5%-1.9% (SORA 1.34%)[3] |
| Pros | Stability; no surprises | Lower now; falls with SORA |
| Cons | Reverts higher post-lock-in | Rate risk if SORA rises |
| Best For | Short-term certainty | Long-term if rates stable |
Refinancing costs: ~S$2k-3k legal/valuation fees, but rebates from DBS/OCBC offset (S$2k+ for >S$1M loans).[3][6] Use Homejourney's mortgage calculator for simulations.
2026 HDB Loan Trends: What to Expect
Refinancing peaks early 2026 as 2023/24 lock-ins end, but moderates mid-year as most switch.[3] Bank rates may stabilize at 1.5%-2%, still below HDB's 2.6%.[1][3] HDB demand steady for lenient LTV (80% vs banks' 75%) and 10% downpayment (CPF/cash).[2]
Actionable steps:
- Check lock-in end: Reprice if within 3Y fixed (no penalty post-DBS style).[1]
- Compare banks: DBS, OCBC, UOB, HSBC on Homejourney bank-rates—side-by-side from all majors.
- Assess affordability: TDSR caps at 55%; use our eligibility tool.
- Apply via Singpass: One form, multi-bank offers instantly.
Pro tip: For Yishun DBSS upgraders, time repricing now—savings cover family Tokyo trips (~S$3.6k/year on S$400k).[3]
Home Protection Scheme (HPS): Essential for HDB Loans
Mandatory for new HDB loans, Home Protection Scheme (HPS) or HPS HDB insures your mortgage against death/total permanent disability, funded via CPF.Home Protection Scheme HPS: Complete HDB Buyers Guide | Homejourney CPF HPS premiums are deducted monthly; compare with bank mortgage insurance HDB like MRTA for flexibility.MRTA vs Term Insurance: Homejourney Mortgage Protection Benefits
Homejourney verifies HPS details transparently, ensuring safe decisions. Link eligibility checks to bank-rates.
Decision Framework for HDB Loan Choices
Evaluate:
- Risk tolerance: Conservative? Stick HDB 2.6%.
- Loan size: >S$1M gets best bank rates/rebates.[6]
- Economy: Fed cuts favor floating.
- Costs: Break-even refinancing in 2-3 years.[1]
Disclaimer: Rates fluctuate; consult Homejourney Mortgage Brokers. Not financial advice—verify on official HDB/MAS sites.
FAQ: HDB Loan Interest Rate Trends
Q: Is HDB loan 2.6% better than banks now?
A: No—banks at 1.55%-1.7% save more, but HDB offers stability/no revert risk.[1][3]
Q: What is current 3M SORA?
A: ~1.34% (Feb 2026), driving low floating rates. Track on Homejourney.
Q: Can I switch back from bank to HDB loan?
A: No, once switched, HDB ineligible forever.[1]
Q: How does HPS affect my HDB loan?
A: Mandatory insurance; CPF-funded for protection. Details in our Home Protection Scheme HPS: Complete HDB Buyers Guide | Homejourney ">HPS guide.
Q: Best bank for HDB refinancing?
A: Compare DBS/OCBC/UOB on Homejourney for rebates.
Ready to act? Visit Homejourney bank-rates for live SORA, comparisons (DBS to Maybank), and Singpass applications. Search budget-fit HDBs on property search. Trust Homejourney for verified, safe property journeys—your partner in transparency.
Explore our pillar: HDB Loan vs Bank Loan 2026 Comparison | Homejourney ">HDB vs Bank Loans 2026.
