HDB Loan vs Bank Loan 2026 Comparison | Homejourney
In 2026, HDB loans offer a stable 2.6% p.a. interest rate with up to 80% LTV and no lock-in, ideal for risk-averse first-time buyers, while bank loans from DBS, OCBC, and UOB provide lower rates around 2.2-3% p.a. but require 25% downpayment with 5% cash.[1][2][3]
Homejourney prioritizes your safety by verifying rates from official sources like HDB and MAS, helping you compare options transparently. This cluster dives into the HDB Loan vs Bank Loan 2026 Comparison, linking to our pillar guide on Singapore HDB financing for full coverage. Use our bank rates page to see live comparisons.
Key Differences: HDB Loan vs Bank Loan in 2026
HDB loans are concessionary rates pegged 0.1% above CPF OA (currently 2.6% p.a.), fixed and stable, with no early repayment penalties.[1][2][3] Bank loans, pegged to SORA or fixed packages, fluctuate but often start lower at 2.2% p.a. from banks like DBS and OCBC.[2][4]
Downpayments differ: HDB requires 20% (fully CPF-eligible), while banks demand 25% with 5% cash minimum—about S$20,000 for a S$400,000 resale flat.[1][3] LTV is 80% for HDB vs 75% for banks.[1]
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | 2.6% p.a. (fixed) | 2.2-3% p.a. (SORA/fixed) |
| Downpayment | 20% (CPF OK) | 25% (5% cash) |
| LTV Limit | 80% | 75% |
| Lock-in | None | 2-3 years |
| Early Repay Penalty | None | 1.5% |
Eligibility for HDB is stricter (Singapore citizens, income ceiling), while banks assess credit score and TDSR.[2] For a S$500,000 BTO flat in Punggol, HDB lets you borrow S$400,000; banks cap at S$375,000.[3]
2026 Interest Rate Trends and Bank Options
SORA rates have dipped to 3-year lows, making bank loans attractive—e.g., DBS 3-year fixed at ~2.2%, saving S$3,500 yearly on a S$350,000 loan vs HDB.[4][6] Track trends on Homejourney's real-time tools.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA volatility favors banks now, but HDB stability suits conservative buyers.[5] Compare DBS, OCBC, UOB, HSBC rates instantly at Homejourney bank-rates.
Pros and Cons: When to Choose HDB vs Bank Loan
- HDB Pros: Stability, higher LTV, full CPF downpayment, no penalties—perfect for first-timers in areas like Sengkang.[1]
- HDB Cons: Higher 2.6% rate means more interest over 30 years (e.g., S$200,000 extra on S$400,000 loan).[1]
- Bank Pros: Lower initial rates, flexible packages (fixed/SORA), for HDB or private properties.[2]
- Bank Cons: Cash downpayment, lock-ins, rate risks post-2029.[2]
Insider tip: Young couples in Yishun save cash with HDB; upgraders to Tampines condos prefer banks for rates.[1][2] Always check TDSR—max 55% of income for debts.
How to Switch HDB to Bank Loan in 2026
Switch HDB to bank loan or refinance HDB loan when bank rates <2.6%. Steps:
- Verify eligibility on Homejourney mortgage calculator using Singpass.
- Compare rates from DBS, OCBC, UOB at bank-rates.
- Submit multi-bank application via Homejourney—get offers from all partners.
- Notify HDB of HDB loan to bank switch (no fee, 1-month notice).[1]
- Complete bank docs: income proof, CPF statements (see HDB Loan Documents Checklist 2026 | Homejourney Guide ">HDB Loan Documents Checklist).
Timeline: 2-4 weeks. Save S$300/month on S$400,000 loan.[4] Read our Switch HDB Loan to Bank Loan: Homejourney's 2026 Guide ">Switch HDB Loan to Bank Loan guide. Homejourney verifies partners for trust.
Actionable Decision Framework
1. Low risk tolerance? Stick with HDB.
2. Rates <2.6% & good credit? Change HDB loan to bank—use Homejourney for multi-offers.
3. Calculate: For S$450,000 flat, HDB monthly ~S$1,900; bank ~S$1,700.[1][2]
Disclaimer: Rates change; consult Homejourney brokers. Not financial advice.
FAQ: HDB Loan vs Bank Loan 2026
Can I convert HDB loan to bank loan anytime?
No penalty from HDB, but check bank lock-in. Process via Homejourney.[1]
Is bank loan better than HDB in 2026?
Yes if rates stay low (currently 2.2%), saving thousands. Track SORA on Homejourney.[4][6]
How much cash for bank downpayment?
5% minimum, e.g., S$25,000 on S$500,000 flat.[3]
Switch HDB to bank loan worth it?
For S$350,000 loan, save S$3,500/year initially.[4] Use our calculator.
Eligibility for refinance HDB loan?
Meet TDSR, good credit. Singapore citizens/PRs; see HDB Loan Eligibility 2026: Who Can Apply & How Much to Borrow ">HDB Loan Eligibility.
Make confident choices with Homejourney's verified tools. Compare now at bank-rates, search properties at property search, and explore our pillar on HDB financing. Your trusted partner for safe transactions.
