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

The Definitive Guide to Choosing the Right Home Loan for Your HDB Flat in 2026

Homejourney brings you this comprehensive pillar guide to help Singapore homebuyers make informed, safe decisions on HDB loan vs bank loan. With interest rates fluctuating and new regulations in play for 2026, understanding the HDB concessionary loan versus bank mortgage HDB options is crucial. We prioritize your trust by verifying data from official sources like HDB and MAS, ensuring transparency every step of the way.

This 2026 guide covers eligibility, rates, costs, and real scenarios. Whether you're a first-time buyer eyeing a BTO in Punggol or refinancing a resale flat in Toa Payoh, find out which loan better HDB purchase suits you. Use our bank rates page to compare live rates from DBS, OCBC, UOB, and more.

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 Breakdown & 2026 Trends
Eligibility Criteria: Who Qualifies?
Downpayment, Fees & Total Costs
Top Banks for HDB Mortgages in 2026
Refinancing from HDB to Bank Loan
Real Calculations: Examples for 2026
Pros, Cons & Who Should Choose What
How Homejourney Makes Loan Decisions Safe
Frequently Asked Questions (FAQ)

Executive Summary: HDB Loan vs Bank Loan in 2026

In 2026, the HDB loan interest rate remains fixed at 2.6% p.a., pegged 0.1% above CPF OA rate, offering stability for risk-averse buyers[1][2][3]. Bank loans, often pegged to SORA, average 2.2-3.0% p.a. but can dip lower during promos, potentially saving thousands over 25-30 years[1][2][3].

Quick Verdict: Choose HDB loan for simplicity, higher LTV (75%), and zero cash downpayment if eligible. Opt for bank loans if you qualify for rates below 2.6%, have strong credit, and can handle 5% cash down[1][4]. Homejourney's tools let you compare instantly at https://www.homejourney.sg/bank-rates.

Key 2026 insight: With SORA stabilizing post-2025 dips, more HDB owners are refinancing to banks[5][7]. First-timers? HDB loan wins for ease. Upgraders? Banks often cheaper long-term.

What is an HDB Concessionary Loan?

The HDB concessionary loan is a government-backed mortgage exclusively for HDB flats, administered by HDB. Pegged to CPF OA rate +0.1% (currently 2.6% p.a.), it offers predictable payments[1][2][3][4]. No lock-in, no early repayment penalties, and maximum LTV of 75% for first-timers (85% for singles under schemes)[4].

Ideal for families buying a 4-room BTO in Tengah for S$500,000. Downpayment: 25% (S$125,000), fully payable via CPF OA + cash. Monthly: ~S$1,800 over 25 years. Insider tip: Use CPF grants first to minimize cash outlay, preserving liquidity for renovations[1].

HDB enforces TDSR (55% debt-to-income) and MSR (30%). Processing: 21 days post-BTO allotment. Apply via HDB InfoWEB with Singpass.

HDB Loan Pros & Cons

Pros	Cons
Higher LTV: Up to 75-85%[1][4]	Higher rate: 2.6% fixed[1][2]
0% cash downpayment possible[1][6]	HDB flats only[1]
No lock-in/penalties[1][2]	Stricter eligibility (citizen, income cap)[2]
Stable payments[1][3]	Higher total interest over tenure[1]

What is a Bank Mortgage for HDB Flats?

A bank mortgage HDB is a private loan from MAS-regulated banks like DBS or OCBC for HDB or private properties. Rates pegged to SORA (3M/6M), fixed, or board rates (e.g., 2.2% promo)[2][3]. LTV capped at 75%, downpayment 25% with min 5% cash[1][2][4].

For that S$500,000 Tengah BTO: Loan S$375,000 at 2.2% SORA +0.5% spread. Monthly: ~S$1,650 (initially lower). But post-2/3-year lock-in, reverts to floating[2]. Banks assess credit via Credit Bureau Singapore.

Flexibility: Promo packages, cashback up to S$5,000. Apply via Homejourney's multi-bank system at https://www.homejourney.sg/bank-rates using Singpass for instant quotes.

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

Feature	HDB Loan	Bank Loan
Interest Rate (2026)	2.6% fixed[1][3]	2.2-3.0% (SORA/fixed)[1][2][3]
LTV Limit	75% (first-timer)[1][4]	75%[1][2]
Downpayment	25% (0% cash)[1][4][6]	25% (5% cash min)[1][2][4]
Lock-in	None[1]	2-3 years[2]
Early Repay Penalty	None[1]	1.5% during lock-in[1][2]
Eligibility	Citizen, income ceiling[2][4]	Credit score, TDSR[2]
Min Loan	None[1]	S$100k[1]
Property	HDB only[1]	HDB + private[1]

This table shows why HDB suits conservative buyers, banks reward strong profiles[1][2].

Interest Rates Breakdown & 2026 Trends

HDB loan interest rate: Fixed 2.6% p.a. (CPF OA 2.5% +0.1%), unchanged since 2003[1][3][4]. Predictable budgeting.

Bank rates: SORA-based (3M SORA ~2.8% Jan 2026 +0.3-0.7% spread = 3.1-3.5% effective, but promos at 2.2%)[2][3]. Fixed packages: 2-3 years at 2.0-2.5%, then revert[2].

SORA replaced SIBOR end-2024; expect volatility with global easing[3]. The chart below shows recent interest rate trends in Singapore:

As seen, SORA dipped to 3-year lows in late 2025, making banks attractive[5][7]. Track live at Homejourney mortgage calculator.

Eligibility Criteria: HDB vs Bank Loans

HDB Loan Eligibility

Singapore Citizen household head
First-timer: No prior property ownership
Income ceiling: S$14,000/month (family), S$7,000 (single)[4] – verify on HDB site
MSR ≤30%, TDSR ≤55%
Not owning private property[2][4]

Example: Family earning S$10,000 qualifies for S$600,000 BTO.

Bank Loan Eligibility

Age 21-65, citizens/PRs/foreigners
Good credit score (>1,400)
TDSR ≤55% (stricter assessment)
Stable income proof (3-6 months payslips)
Min S$2,000/month income[2]

Banks like DBS favor salaried professionals. Use Homejourney's eligibility calculator: https://www.homejourney.sg/bank-rates#calculator.

Downpayment, Fees & Total Ownership Costs

HDB: 25% down (e.g., S$125k on S$500k flat), 100% CPF-eligible. No agent fees if direct[1][6]. Total fees: S$2,000-5,000 (legal, valuation).

Bank: 5% cash (S$25k) + 20% CPF/cash. Lock-in penalties: 1.5% on prepaid amount. Valuation: S$500-1,000[1][2].

Insider tip: For Toa Payoh resale (S$700k), banks may offer lawyer fees waiver. Compare total cost on Homejourney – link properties from https://www.homejourney.sg/search.

Top Banks for HDB Mortgages in 2026

Compare partners via Homejourney:

DBS: Market leader, SORA PEA 2.88% (3M+0.58%), 2-yr fixed 2.25%. Strong app[2].
OCBC: Promo 2.2%, cashback S$2,800. Good for HDB[3].
UOB: Fixed 2.3% 3yrs, no penalty post-lock-in.
HSBC/Standard Chartered: Competitive for expats, 2.4% SORA.
Maybank/CIMB/RHB: Lower spreads for mid-tier, 2.9% effective.

See all at https://www.homejourney.sg/bank-rates. For SORA details, check SORA Linked Home Loans Explained.

Refinancing from HDB to Bank Loan in 2026

With rates falling, HDB owners refinance to save[5][7]. Steps:

Check >2 years ownership (HDB rule).
Compare rates – if bank <2.6% + costs.
Apply via Homejourney multi-bank (one form, multiple offers).
Costs: 1.5% penalty? No from HDB. Legal: S$3,000.

Example: S$400k outstanding at 2.6% to DBS 2.2% saves S$15k over 20 years. Track trends with our chart.

Real Calculations: HDB vs Bank for 2026 Scenarios

Scenario 1: S$500k 4-room BTO, 25yrs, family income S$8k

HDB: Loan S$375k @2.6%, monthly S$1,720, total interest S$232k.
Bank (DBS 2.2% initial): Monthly S$1,580, but post-lock-in ~S$1,650, total ~S$210k (if stable).

Scenario 2: S$700k Toa Payoh resale

HDB: Cash down S$0 if CPF sufficient.
Bank: S$35k cash, potential S$20k savings/year 1.

Calculate yours: Homejourney calculator. Assumptions: TDSR compliant.

Pros, Cons & Decision Framework

Choose HDB if: First-timer, low cash, prioritize stability, marginal credit[1][6].

Choose Bank if: Rates <2.6%, good credit, plan to refinance, extra cash OK[3][5].

Framework: 1) Check eligibility. 2) Run numbers. 3) Compare promos on Homejourney. Disclaimer: Not financial advice; consult brokers via our platform.

How Homejourney Ensures Safe Loan Decisions

Homejourney prioritizes your safety with verified rates, Singpass apps, and multi-bank competition. Features:

Live rates from DBS-UOB: Compare now.
Eligibility calculator: Instant TDSR/MSR.
One-click multi-bank apply: Banks bid for you.
Post-purchase: Aircon services for maintenance.

Find HDBs in budget: Property search. For FHR options, see FHR Loans Guide.

Frequently Asked Questions: HDB Loan vs Bank Loan 2026

Q: What is the HDB loan interest rate in 2026?
A: Fixed at 2.6% p.a.[1][3]

Q: Can I use HDB loan for resale flats?
A: Yes, up to 75% LTV if eligible[4].

Q: Which loan better HDB for first-timers?
A: HDB for ease, banks if promo rates low[1][6].

Q: Bank mortgage HDB downpayment cash required?
A: Min 5%[1][2].

Q: How to switch from HDB to bank loan?
A: After 2 years, apply via Homejourney[5].

Q: Impact of SORA on bank loans 2026?
A: Expect 2.8-3.2%; monitor our chart[3].

Q: Can PRs get HDB concessionary loan?
A: No, must be SC household head[4].

More FAQs? Use our bank-rates tool.

Ready for your HDB journey? Start with Homejourney's verified tools for a trusted, transparent process. Compare HDB loan vs bank loan today and secure your future safely.