HDB Loan vs Bank Loan 2025: Clear Comparison Guide | Homejourney

The fastest way to decide between an HDB loan and a bank loan in 2025 is this: choose an HDB loan if you value stability, low cash outlay, and maximum use of CPF, and choose a bank loan if you are comfortable with rate changes and want to minimise interest costs over time.

This HDB Loan vs Bank Loan 2025 Comparison guide is a focused Homejourney cluster article under our main HDB financing pillar HDB Resale Flat Financing Complete Guide 2025 | Homejourney . It zooms in on the practical decision of which loan to pick, how to use CPF for HDB, and what the real numbers look like for Singapore buyers in 2025.

HDB Loan vs Bank Loan 2025: Key Differences at a Glance

As of 2025, the main differences between an HDB loan and a bank housing loan are interest rate, downpayment, CPF usage rules, loan tenure, and flexibility.

Interest rate: HDB loan is at a concessionary rate of 2.6% p.a., pegged at 0.1% above the CPF OA interest of 2.5%.[7][2]
Bank loans: Banks offer fixed and floating packages; since early 2025, many packages have ranged roughly around 1.55%–1.8% p.a. according to market coverage, lower than HDB’s 2.6%.[4][3]
Downpayment (for HDB flats): HDB loan typically allows up to 75% loan-to-value (LTV), with downpayment payable fully via CPF OA or cash.[2] Bank loans usually require minimum 25% downpayment, of which 5% must be in cash and 20% cash or CPF.[2][1]
Loan tenure: HDB loan maximum tenure is 25 years, or until the buyer turns 65, whichever is earlier.[1][2] Bank loan for HDB can go up to 30 years, subject to MAS rules, though exceeding 25 years reduces your LTV.[1][2]
Lock-in & penalties: HDB loans have no lock-in and no early repayment penalty.[2][1] Most bank loans have a 2–3 year lock-in, with penalties (~1.5% of outstanding) for early full redemption or refinancing during lock-in.[2][1]
Refinancing options: You can move from HDB to bank later, but not from bank back to HDB.[1][2]

Homejourney consolidates these differences into an instant comparison on our bank rates page Bank Rates , so you can see 2025 rates from DBS, OCBC, UOB, HSBC, Standard Chartered and more side by side.

Interest Rate Comparison in 2025: Stability vs Savings

HDB’s concessionary loan rate has stayed at 2.6% p.a. for many years, as it is pegged at 0.1% above the CPF OA rate of 2.5%.[7][2] This fixed rate gives predictable monthly instalments and is especially comforting for first-time buyers worried about rising rates.

In contrast, bank loan rates in early–mid 2025 have generally fallen below the HDB rate. Straits Times and Business Times reports note that fixed and floating home loan packages from major banks have been around 1.55%–1.8% p.a., significantly lower than 2.6%.[4][3] Some banks have offered three-year fixed HDB home loans roughly one percentage point below the HDB rate.[3]

The chart below shows recent interest rate trends in Singapore:

When you can consistently secure bank rates at least 0.6–1.0 percentage point below 2.6%, the interest savings on a typical S$350,000–S$500,000 HDB loan over the lock-in period can be meaningful, provided you accept the risk of rates rising later.

Using CPF for HDB: OA, Downpayment and CPF HDB Rules

For many buyers, the real question is not just HDB Loan vs Bank Loan 2025 Comparison, but also how to optimise CPF HDB purchase rules to reduce cash outlay.

How much CPF OA can you use for a flat?

You can generally use your CPF OA for flat purchase to pay:

Downpayment for both HDB and bank loans (subject to scheme rules and available OA balance).
Buyer’s Stamp Duty (BSD) and legal fees (via CPF if arranged with your law firm).
Monthly instalments after key collection.

For an HDB loan, at least 25% of the purchase price is downpayment and this can be paid fully with CPF OA, cash, or a mix of both.[2] For a bank loan, at least 25% downpayment is required, but 5% must be in cash and the remaining 20% can be from CPF OA or cash.[2]

For a deeper breakdown of CPF HDB rules (such as Valuation Limit, Withdrawal Limit, and property’s remaining lease), see Homejourney’s full guide: CPF for HDB Purchase: Complete Usage Guide 2025 CPF for HDB Purchase: Complete Usage Guide 2025 | Homejourney and How to Use CPF for HDB Down Payment How to Use CPF for HDB Down Payment | Homejourney Guide .

Insider example: Young couple buying a 4-room resale in Yishun

Imagine a young couple buying a 4-room resale flat near Yishun MRT for about S$520,000—a typical price point you see on the ground in 2025 for well-renovated units within 10 minutes’ walk from the station.

They each have about S$90,000 in CPF OA after a few years of work, so CPF is strong but cash is tight.
An HDB loan allows them to use mostly CPF for the 25% downpayment (around S$130,000) and keep cash for renovation and moving.
A bank loan requires 5% cash (~S$26,000) upfront. For many couples staying with parents in Yishun or Khatib while saving up, that cash hurdle is the main deciding factor—even when bank rates are cheaper.

This is a core trade-off in 2025: HDB loan = CPF-friendly, bank loan = interest-friendly.

Monthly Instalments: Simple 2025 Calculations

Below is a straightforward illustration for a loan of S$400,000 over 25 years, purely for comparison (numbers rounded, exclude fees and insurance):

HDB loan at 2.6% p.a.: Monthly instalment is roughly around S$1,810–S$1,830.
Bank loan at 1.7% p.a. (fixed for 3 years): Monthly instalment is roughly around S$1,650–S$1,670 during the lock-in period.

That difference of about S$150–S$180 per month can add up to over S$5,000–S$6,000 in interest savings across three years. However, after the lock-in, your bank loan may reprice higher depending on SORA and bank margins. The risk is that future rates could rise closer to—or above—2.6%.

To see what this looks like for your own income and loan size, use the Homejourney mortgage calculator at our bank rates page Mortgage Rates or . You can plug in your salary, age, and loan amount and instantly see estimated monthly repayments under both HDB and major bank packages.

Loan Tenure, TDSR/MSR and Eligibility

In 2025, your loan size is still governed by MAS and HDB rules such as the Mortgage Servicing Ratio (MSR) for HDB flats and Total Debt Servicing Ratio (TDSR) for overall debt obligations.