HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney

This definitive guide compares HDB loan vs bank loan options for Singapore homebuyers in 2026, helping you decide which is better based on rates, eligibility, and costs. Homejourney prioritizes your safety with verified data, real-time comparisons at https://www.homejourney.sg/bank-rates, and Singpass-enabled applications for faster, secure approvals.[1][2][3]

Whether you're a first-time HDB buyer or refinancing, understand HDB concessionary loan stability at 2.6% vs potentially lower bank mortgage HDB rates. Calculate eligibility instantly on Homejourney and let banks compete for your business.

Executive Summary
What is an HDB Concessionary Loan?
What is a Bank Mortgage for HDB?
HDB Loan vs Bank Loan: Side-by-Side Comparison
Interest Rates in 2026: HDB vs Banks
Eligibility, LTV & Downpayment Rules
Top Bank Packages for HDB in 2026
Refinancing from HDB to Bank Loan
Cost Calculations & Real Examples
Pros, Cons & Which Loan is Better?
How Homejourney Makes It Safe & Easy
FAQ: HDB Loan vs Bank Loan

Executive Summary: HDB Loan vs Bank Loan 2026

In 2026, HDB loan interest rate remains fixed at 2.6% p.a. (0.1% above CPF OA rate), offering stability and 80% LTV for eligible buyers. Bank loans average 2.2-2.5% effective rates, lower than HDB but variable with SORA trends and 75% LTV limits.[1][2][3][7]

Choose HDB for simplicity, no lock-ins, and full CPF downpayments if you're a first-timer with limited cash. Opt for banks if you qualify for promo rates <2.6% and have 5% cash ready. Homejourney's tools verify your best option transparently.[4][8]

Key insight: With rates at 3-year lows, more HDB owners refinance to banks, saving thousands long-term. Use our mortgage calculator to simulate.[7][8]

What is an HDB Concessionary Loan?

The HDB concessionary loan is a government-backed mortgage for HDB flats, pegged at 2.6% p.a. fixed rate (0.1% above CPF Ordinary Account rate of 2.5%). It's designed for Singapore Citizens buying new or resale HDB flats.[1][2][5]

No minimum loan amount, maximum 25-year tenure, and no early repayment penalties. Eligibility requires Singapore Citizen household, income ceiling (S$14,000/month for families), and no private property ownership in last 30 months.[1][3]

HDB Loan Pros

Higher 80% LTV: Borrow more, downpayment just 20% fully via CPF/cash mix.[1][2]
Stable rates: Tracks CPF OA, no market volatility.[2][4]
Flexible: No lock-in, refinance to bank anytime.[2]
Accessible: Lenient credit checks, ideal for first-timers.[3]

HDB Loan Cons

Higher rate: 2.6% vs bank promos <2.5%.[2][4][7]
Stricter eligibility: Citizenship, income caps.[1][3]
HDB flats only: Can't use for private property.[1]
Shorter max tenure: 25 years vs banks' 30.[5]

What is a Bank Mortgage for HDB?

A bank mortgage HDB is a private loan from MAS-regulated banks like DBS, OCBC, UOB for HDB flats or private properties. Rates pegged to SORA (Singapore Overnight Rate Average), fixed deposits, or board rates, often starting at 1.5-2.2% for 1-3 years.[2][3][4]

Requires good credit, stable income under TDSR (60% debt cap), and 25% downpayment (5% cash minimum). Minimum loan S$100,000, up to 30-year tenure.[2][3]

Bank Loan Pros

Lower initial rates: Often below 2.6%.[2][4][7]
Longer tenure: Up to 30 years.[5]
Flexible products: SORA, fixed, hybrid options.[3]
Private property eligible.[1]

Bank Loan Cons

75% LTV: Higher 25% downpayment, 5% cash.[1][2]
Lock-ins: 2-3 years, 1.5% early repayment penalty.[2][3]
Variable rates: Rise with SORA.[4][7]
Strict approval: Credit score, TDSR checks.[3]

HDB Loan vs Bank Loan: Side-by-Side Comparison

Use this table for quick insights on which loan better HDB buyers need.

Feature	HDB Loan	Bank Loan
Interest Rate	2.6% fixed[1][2]	1.5-2.5% variable[2][4][7]
LTV Limit	80%[1][2]	75%[1][2]
Downpayment	20% (full CPF OK)[2]	25% (5% cash min)[2][3]
Max Tenure	25 years[5]	30 years[5]
Lock-in	None[2]	2-3 years[3]
Early Repay Penalty	None[2]	1.5%[2]
Eligibility	Strict (citizen, income)[1][3]	Credit-based[3]

Homejourney verifies these rules from HDB/MAS sources for your confidence.[1][2][3]

Interest Rates in 2026: HDB vs Banks

HDB holds at 2.6% p.a., stable for decades. Banks track SORA; in 2026, 3M SORA averages ~2.3%, enabling packages ~2.2% effective (SORA + 0.5% spread).[4][7]

SORA replaced SIBOR end-2024; it's a risk-free overnight rate reflecting true borrowing costs. Promo rates beat HDB now, but revert higher post-lock-in.[4][7]

The chart below shows recent interest rate trends in Singapore:

As seen, rates hit 3-year lows in 2026, favoring banks short-term. Track live on Homejourney bank rates.[7][8]

Eligibility, LTV & Downpayment Rules

HDB: Singapore Citizen family nucleus, <S$14k income, no private property sold in 30 months, first HDB loan (or 5yr gap).[1][3] 80% LTV means S$320k loan on S$400k BTO 4-room flat, 20% down (S$80k CPF OK).

Banks: Age 21-65, TDSR <60%, good credit. 75% LTV: S$300k loan on same flat, 25% down (S$60k CPF + S$40k cash min S$20k).[2][3]

Insider tip: First-timers save cash with HDB; upgraders with equity prefer banks. Check via Homejourney's eligibility calculator.

Top Bank Packages for HDB in 2026

Compare real-time on https://www.homejourney.sg/bank-rates. Here's 2026 snapshot for HDB flats:

Bank	Promo Rate (1-2yr)	Reverting Rate	Best For
DBS	SORA+0.4% (~1.9%)	SORA+1.2%	High earners
OCBC	2.2% fixed	SORA+0.9%	Stability seekers
UOB	SORA+0.35% (~1.85%)	SORA+1.0%	Refinancers
HSBC	1.8% fixed	SORA+1.1%	Expats/PRs
Standard Chartered	2.0% promo	SORA+0.8%	Salary crediting

Others like Maybank, CIMB offer competitive SORA pegs. Rates from Homejourney partners, updated live.[2][3][4] See 房贷类型完整对比：银行利率比较 | Homejourney指南 for details.

Refinancing from HDB to Bank Loan

Can't switch back to HDB once on bank loan. With 2026 lows, refinance if bank rate <2.6% and >2yr remaining tenure. Process: Check eligibility, apply via Homejourney multi-bank submission (Singpass auto-fill), get offers.[8]