HDB Loan vs Bank Loan 2026 Comparison | Homejourney

In 2026, HDB loans offer a stable 2.6% p.a. HDB loan interest rate with no lock-in and full CPF usage for downpayment, while bank loans provide potentially lower rates from 2.20% p.a. but require 5% cash down and have lock-in periods[1][2][3]. For most first-time HDB buyers, HDB loans prioritize safety and predictability; bank loans suit those with strong credit seeking savings, as per Homejourney's verified data.

This cluster dives deep into the HDB Loan vs Bank Loan 2026 Comparison, building on our pillar guide Types of Home Loans Singapore: Complete Comparison via Homejourney. Homejourney verifies all rates in real-time for your trusted decisions.

Key Differences: HDB Concessionary Loan vs Bank Mortgage HDB

The HDB concessionary loan is pegged at 0.1% above CPF Ordinary Account rate (currently 2.6% p.a.), fixed and adjusted quarterly[1][3]. It allows up to 75-80% Loan-to-Value (LTV) with 20-25% downpayment fully payable via CPF OA—no cash needed[2][6].

Bank mortgages for HDB flats (from DBS, OCBC, UOB, HSBC, etc.) start at 2.20% p.a. (SORA-pegged or fixed), but cap LTV at 75% with 25% downpayment (min. 5% cash, rest CPF/cash)[1][3]. Rates fluctuate post-lock-in (2-3 years), risking hikes[4].

Feature	HDB Loan	Bank Loan
Interest Rate	2.6% p.a. fixed[1][2]	2.20%-3% p.a. (promo/floating)[1][4]
Downpayment	20-25% (100% CPF OK)[2][3]	25% (min 5% cash)[1][3]
LTV Limit	Up to 80%[2]	75%[3]
Lock-in	None	2-3 years[1]
Eligibility	SC family, income ceiling[1]	Credit score, TDSR[1][2]

Homejourney's platform lets you compare these instantly at https://www.homejourney.sg/bank-rates, ensuring transparency.

2026 Interest Rate Outlook & Trends

HDB's 2.6% remains stable, but bank rates may dip further if SORA eases (projected 2.0-2.5% effective)[4]. SORA replaced SIBOR in 2024; 3M SORA drives most packages[1].

The chart below shows recent interest rate trends in Singapore:

As seen, rates trended down in late 2025, favoring banks now—but HDB wins for stability amid volatility[4]. Track live on Homejourney.

Which Loan Better HDB Buyers? Pros, Cons & Examples

HDB Loan Pros: No early repayment penalties, stable payments ideal for families budgeting via CPF[2]. Example: S$400K resale BTO in Punggol—20% down (S$80K CPF), monthly ~S$1,500 at 2.6% over 25 years[1]. Insider tip: Use full CPF OA to preserve cash for renos (~S$30K typical).

HDB Cons: Higher long-term cost vs promo bank rates[1].

Bank Loan Pros: Lower initial rates save ~S$20K interest over 5 years on S$500K loan[4]. Flexible packages (SORA, FDR) from DBS/OCBC.
Best for upgraders with S$10K+ monthly income, good credit.

Bank Cons: 1.5% penalty on early payoff, cash downpayment strains first-timers (e.g., S$20K for S$400K flat)[3]. Late fees vary (up to 8.1% p.a.)[1].

Decision framework: Choose HDB if prioritizing safety (80% Singaporeans do); bank if rates <2.4% and you can lock low[2][4]. Calculate on Homejourney's mortgage calculator.

Eligibility & Application: Actionable Steps

Check HDB: SC, first-timer, income <S$14K/month. Apply via HDB Flat Portal post-OTP[1].
Bank: TDSR <55%, credit score >600. Docs: Income proof, CPF statements. Processing: 7-21 days[2].
Submit multi-bank app on Homejourney bank-rates with Singpass—get offers from DBS, UOB, HSBC fast.
Verify properties on Homejourney property search.

Disclaimer: Rates as of Feb 2026; consult HDB/MAS. Homejourney verifies for accuracy, not financial advice.

Homejourney Makes It Safe & Simple

Compare DBS (2.25% promo), OCBC (SORA+0.5%), UOB rates live. Apply once via Singpass—banks compete for you. Link to HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney ">HDB Loan vs Bank Loan: Which is Better for 2026? for more.