HDB Loan vs Bank Loan 2026 Comparison | Homejourney
For Singapore HDB buyers in 2026, HDB loans offer stability at a fixed 2.6% p.a. rate with 75-80% LTV and no lock-in, while bank loans provide potentially lower rates from 2.20% p.a. but require 25% downpayment (5% cash) and carry refinancing risks.[1][2][3]
This cluster article dives into the HDB Loan vs Bank Loan 2026 Comparison, helping first-time buyers and upgraders decide. As part of Homejourney's comprehensive mortgage pillar guide, it equips you with actionable steps for safe, informed choices in a trusted environment. Use our bank rates page to compare real-time rates from DBS, OCBC, UOB and more.
Key Differences: HDB Concessionary Loan vs Bank Mortgage for HDB
The HDB concessionary loan is pegged 0.1% above CPF OA rate at 2.6% p.a., offering predictability for HDB flats only.[1][3] Bank mortgages for HDB flats start lower, often SORA-pegged at 2.20-3% p.a., but fluctuate with market trends like falling rates in 2025-2026.[2][3][6]
Homejourney verifies rates daily from official sources, ensuring transparency. For a $500,000 resale HDB flat, HDB loan covers up to $375,000 (75% LTV), needing $125,000 downpayment fully via CPF. Bank loan maxes at 75% too, but demands 5% cash ($25,000) minimum.[1][4]
Interest Rates Breakdown
HDB loan interest rate remains fixed at 2.6% p.a., immune to SORA shifts.[1][3] Banks like DBS and OCBC offer fixed 1-5 year packages at ~2.20% before reverting to SORA + spread (e.g., 0.5-1%).[2] In 2026, with rates at 3-year lows, banks edge out on cost but risk hikes post-lock-in.[5][6]
The chart below shows recent interest rate trends in Singapore:
As seen, SORA has trended down, favoring banks short-term. Track live on Homejourney bank-rates.
Downpayment and LTV: Which Loan Better for HDB Buyers?
HDB loans require 20-25% downpayment, payable fully by CPF OA + cash—no mandatory cash minimum.[1][4] Banks mandate 25% total, with 5% cash (e.g., $25,000+ for typical BTO).[2] Both cap at 75% LTV for second-timers per 2022 rules.[4]
- HDB advantage: Conserve cash for renovations in areas like Punggol or Tengah.
- Bank edge: Flexibility for private property too, but stricter TDSR (60% debt ratio).
Insider tip: First-timers save $20,000+ cash with HDB loans, ideal for young families near MRTs like Boon Lay.[1] Calculate your power on Homejourney's mortgage calculator.
Pros and Cons: HDB Loan vs Bank Loan Side-by-Side
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | Fixed 2.6% p.a.[1][3] | 2.20-3% p.a., variable[2] |
| LTV Limit | 75-80%[1] | 75%[2][4] |
| Downpayment | 20-25% (full CPF OK)[4] | 25% (5% cash min)[1][2] |
| Lock-in | None[1] | 2-3 years, 1.5% penalty[2] |
| Eligibility | Citizens, income ceiling[2] | Credit score, TDSR[2] |
| Early Repay | No penalty[1] | Penalty during lock-in[1] |
Banks suit rate shoppers; HDB for stability. Recent refinancing surge shows HDB owners switching to banks amid low rates.[6] Compare DBS vs OCBC on HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney .
2026 Bank Loan Options for HDB Flats
Top Homejourney partners: DBS (market leader, SORA +0.6%), OCBC (promo fixed ~2.3%), UOB (flexible FDR), HSBC/Standard Chartered (expat-friendly).[2] Rates as of Jan 2026: effective 2.20-2.60%.[3]
- DBS: Strong app via Singpass, 2-3yr lock-in.
- OCBC/UOB: Competitive for HDB, refinancing perks.
- Maybank/CIMB: Lower entry for investors.
Submit one app on Homejourney—get offers from all, auto-filled via Singpass for faster approvals. Best for which loan better HDB? Use our tool.
Actionable Steps: Choose Your Loan on Homejourney
- Check eligibility: Use calculator for TDSR/HDB caps.
- Compare rates: View real-time HDB vs banks at bank-rates.
- Apply multi-bank: One form, multiple offers—no hassle.
- Refinance if bank <2.6%: No HDB penalty.[1][5]
- Search properties: Match budget via property search.
Disclaimer: Rates change; consult Homejourney brokers. Not financial advice—verify with HDB/MAS.
FAQ: HDB Loan vs Bank Loan 2026
Is HDB loan or bank loan cheaper in 2026?
Bank loans are often cheaper at 2.20% vs HDB's 2.6%, but factor lock-ins and fluctuations.[2][3][6]
Can I use HDB loan for resale flats?
Yes, up to 75% LTV if eligible (citizen, no prior property).[1][4]
What's the HDB loan interest rate in 2026?
Fixed 2.6% p.a., pegged to CPF OA +0.1%.[1][3]
Switch from HDB to bank loan?
Yes, anytime—no penalty. Ideal if banks drop below 2.6%.[5][6]
How to compare bank mortgage HDB options?
Instantly on Homejourney's bank-rates with SORA tracker.
Ready for your HDB journey? Start with Homejourney's trusted tools for safety and transparency. Explore our pillar on HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney for full coverage, and compare now at https://www.homejourney.sg/bank-rates.
