HDB Loan Interest Rate vs Bank Loan 2026 Comparison
The Definitive Guide for Singapore Home Buyers – Save Thousands with Homejourney's Trusted Analysis
Homejourney brings you this comprehensive pillar guide to HDB loan interest rate vs bank loans in 2026. With bank rates dipping below the HDB concessionary rate of 2.6%, more HDB owners are refinancing for savings. We prioritize your safety and trust, verifying all data from official sources like HDB and MAS.
Whether you're a first-time buyer or upgrader, understand HDB vs bank loan rate differences, SORA trends, and when bank loan better options emerge. Use Homejourney's bank rates page to compare DBS, OCBC, UOB live.
Table of Contents
- Executive Summary
- HDB Loan Basics: The 2.6% Concessionary Rate Explained
- Bank Loans in 2026: Current Rates and Packages
- Direct HDB vs Bank Loan Rate Comparison 2026
- SORA Deep Dive: How It Drives Bank Rates
- Fixed vs Floating Rates: Pros, Cons, and Who Wins
- Loan Eligibility: LTV, MSR, TDSR Rules
- Refinancing from HDB to Bank Loans in 2026
- Decision Framework: Is Bank Loan Better for You?
- Homejourney Tools for Safe Loan Decisions
- FAQ: HDB Loan Interest Rate vs Bank Loan 2026
Executive Summary
In 2026, the HDB loan interest rate remains steady at 2.6% (CPF OA + 0.1%), offering stability but higher costs[1][2][4]. Bank loans from DBS, OCBC, UOB start at 1.35%-1.7% (3M SORA + margin or fixed), saving $3,600+ yearly on a $400k loan[2][3].
Key Insight: Bank loans are now bank loan better for most, but HDB suits low-downpayment needs (90% LTV vs 75%). Refinancing surges as rates hit 3-year lows[3]. Homejourney verifies rates daily for your trusted choice – explore bank-rates.
HDB Loan Basics: The 2.6% Concessionary Rate Explained
The HDB concessionary rate is pegged at 0.1% above CPF Ordinary Account (OA) rate, currently 2.6% p.a. – unchanged for over a decade[1][2][4]. It's technically floating but stable due to CPF OA formula (2.5% + 0.1%).
This provides predictability: monthly payments don't spike with market changes. Ideal for first-time buyers under MSR (30% of income). However, it's higher than bank rates in 2026's low environment[3].
Historical Stability of HDB Rates
HDB rates held at 2.6% since 2004, shielding borrowers from SIBOR/SORA volatility[1]. In high-rate periods (2023: SORA >3.6%), HDB was cheaper; now reversed[3].
Insider Tip: For BTO in mature estates like Toa Payoh (near Braddell MRT, 5-min walk), HDB's 90% LTV eases 20-25% downpayment burden using CPF[4].
Bank Loans in 2026: Current Rates and Packages
Bank loans fluctuate with SORA or fixed for 1-3 years. As of Feb 2026, lowest: 1.35% fixed (large loans >$1M), 1.55%-1.7% for HDB (POSB/DBS, OCBC)[2][3][5][6]. Partners: DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public, Hong Leong, Citibank.
Floating: 3M SORA (~1.34%) + 0.25%-0.5% margin = 1.6%-1.8%[3][5]. Fixed: 1.43%-1.60% for 1-3 years, no lock-in penalties at DBS/POSB[2]. Cash rebates $2,000-$2,800 on refinancing[5].
Major Bank Rates Snapshot (Feb 2026)
| Bank | Lowest Fixed (p.a.) | Floating (3M SORA +) | Rebate |
|---|---|---|---|
| DBS/POSB | 1.55%-1.70% | 1.34% + 0.3% | $2,300 |
| OCBC | 1.60% | 1.34% + 0.4% | $2,000-$2,800 |
| UOB | 1.43% | 1.34% + 0.25% | $2,300 |
| HSBC/Standard Chartered | 1.55% | 1.34% + 0.3% | $2,000+ |
Rates for loans >$500k; conditions apply[5][6]. Compare live on Homejourney bank-rates.
Direct HDB vs Bank Loan Rate Comparison 2026
HDB vs bank loan rate: HDB 2.6% fixed vs banks 1.35%-1.8%. On $500k loan (25-year tenure), HDB monthly: ~$2,190; Bank (1.6%): ~$1,980 – save $2,520/year[3].
Monthly Payment Comparison Table ($400k Loan, 25 Years)
| Loan Type | Rate (2026) | Monthly Payment | 1-Year Savings vs HDB |
|---|---|---|---|
| HDB Concessionary | 2.6% | $1,750 | - |
| DBS/POSB Fixed | 1.60% | $1,590 | $1,920 |
| OCBC Floating | 1.74% | $1,620 | $1,560 |
| UOB 3M SORA | 1.59% | $1,585 | $1,980 |
Calculations approximate; use Homejourney mortgage calculator for precision[1][2][3].
The chart below shows recent interest rate trends in Singapore, highlighting why bank loans lead in 2026:
As seen, 3M SORA at 1.34% (3-year low) makes bank loan better now, but monitor via Homejourney[3].
SORA Deep Dive: How It Drives Bank Rates
SORA (Singapore Overnight Rate Average) replaced SIBOR by 2024 – daily volume-weighted interbank rate[3][4]. 3M Compounded SORA: ~1.34% (Oct 2025 low), expected 1.3%-1.4% end-2026[3].
3M vs 6M: 3M more volatile but responsive; 6M smoother. Bank floating: SORA + 0.25%-0.5%. Track live 3M/6M SORA on Homejourney bank-rates.
Original Insight: With US Fed cuts and low SG inflation, SORA may dip to 1.2% mid-2026 – prime for locking bank rates[3].
Fixed vs Floating Rates: Pros, Cons, and Who Wins
| Type | Pros | Cons | Best For |
|---|---|---|---|
| Fixed (1-3Y) | Predictable payments; 1.43%-1.7% now | Reverts higher post-lock-in | Risk-averse buyers |
| Floating (SORA) | Lower long-term if rates fall; flexible | Volatile; could rise | Investors expecting cuts |
HDB mimics 'fixed' at 2.6%. In 2026 lows, floating edges out[2][3][5].
Loan Eligibility: LTV, MSR, TDSR Rules
HDB: 90% LTV (first-timer), MSR 30% income, TDSR 55%[1]. Bank: 75% LTV, TDSR only 55%. Use CPF for downpayment – see How to Use CPF for HDB Down Payment: Homejourney Guide .
Practical Advice: $8k/month household? Max HDB ~$720k under MSR. Banks cap at TDSR. Test on Homejourney calculator.
Refinancing from HDB to Bank Loans in 2026
Volumes up 35-40% YoY as banks undercut 2.6%[3]. Steps: 1) Check eligibility (no return to HDB post-switch). 2) Compare via Homejourney. 3) Apply multi-bank with Singpass. Costs: ~1-2% legal fees, offset by rebates[3].
Warning: Irreversible; suits stable income. Reference HDB Loan Interest Rate Trends Analysis 2026 | Homejourney for trends.
Decision Framework: Is Bank Loan Better for You?
- Risk Tolerance: Conservative? HDB or fixed bank.
- Downpayment: <25%? HDB 90% LTV wins.
- Income Stability: Variable? Floating if rates falling.
- Tenure: Short? Bank savings amplify.
- Outlook: SORA 1.3%? Bank now[3].
Quiz your fit: Low risk + small savings = HDB; Savings priority = Bank. Homejourney personalizes via bank-rates.
Homejourney Tools for Safe Loan Decisions
Homejourney prioritizes trust: Track SORA daily, compare DBS-OCBC-UOB side-by-side, calculate payments, submit one Singpass app for multi-bank offers. Link budgets to property search; post-purchase, aircon services.
Apply securely: homejourney.sg/bank-rates. Our brokers guide transparently.
FAQ: HDB Loan Interest Rate vs Bank Loan 2026
What is the current HDB loan interest rate? 2.6% (CPF OA + 0.1%), stable[1][4].
Is bank loan better than HDB in 2026? Yes for rates (1.35%-1.8% vs 2.6%), if you afford 25% down[2][3].
Can I switch back from bank to HDB loan? No, once switched, permanent[3].
How much can I save refinancing $500k loan? ~$2,500/year at 1.6% bank vs 2.6% HDB[3].
What is 3M SORA now? ~1.34%; track on Homejourney[3].
HDB vs bank for first-timer BTO? HDB for high LTV; bank if income >$10k[1].
Best bank for HDB loan 2026? DBS/POSB 1.60% fixed, UOB 1.43%; compare Homejourney[6][7].
Does TDSR apply to HDB loans? MSR for HDB purchase; TDSR for banks/refi[1].
How to apply via Homejourney? Singpass to bank-rates – instant verification, multi-offers.
Disclaimer: Rates change; not financial advice. Consult professionals. Data from HDB/MAS Feb 2026[1][2][3]. Homejourney verifies for your safety.
Next Steps: Compare rates now at , search properties at property search, explore Projects Directory . Homejourney supports your journey with transparency.
References
- Singapore Property Market Analysis 1 (2026)
- Singapore Property Market Analysis 2 (2026)
- Singapore Property Market Analysis 4 (2026)
- Singapore Property Market Analysis 3 (2026)
- Singapore Property Market Analysis 5 (2026)
- Singapore Property Market Analysis 6 (2026)
- Singapore Property Market Analysis 7 (2026)
