HDB Loan vs Bank Loan: Which is Better for 2026? | Homejourney
The definitive guide to HDB concessionary loans vs bank mortgages for Singapore homebuyers in 2026. Whether you're a first-time buyer eyeing a BTO flat in Punggol or upgrading to a resale in Tampines, choosing between an HDB loan and bank loan impacts your monthly payments, total interest, and financial flexibility. Homejourney prioritizes your safety with verified data from HDB and MAS, helping you make confident decisions.
This pillar article breaks down HDB loan interest rates, eligibility, downpayments, and bank alternatives from DBS, OCBC, UOB, and more. Compare real-time rates on Homejourney's bank rates page and calculate eligibility instantly[1][2][3].
Table of Contents
- Executive Summary
- What is an HDB Concessionary Loan?
- What is a Bank Mortgage for HDB?
- HDB Loan vs Bank Loan: Key Differences
- Interest Rates Comparison 2026
- Eligibility and Requirements
- Top Bank Loans for HDB Flats
- Pros and Cons: Which Loan is Better?
- Loan Calculations and Examples
- Refinancing from HDB to Bank Loan
- How Homejourney Simplifies Your Choice
- FAQ: HDB Loan vs Bank Loan
Executive Summary: HDB Loan vs Bank Loan 2026
In 2026, HDB loans offer stability at a fixed 2.6% p.a. (0.1% above CPF OA rate), with 75-80% LTV, no lock-in, and full CPF downpayment usage—ideal for risk-averse first-timers[1][2][3]. Bank loans start lower at ~2.2-3% p.a. (SORA-pegged or fixed), but require 25% downpayment (5% cash minimum), have lock-ins, and fluctuate with markets[1][4].
Bank loans save ~S$3,500 yearly on a S$350k loan initially, but HDB wins for simplicity[4]. Use Homejourney's mortgage calculator to see which fits your budget. Disclaimer: Rates change; consult HDB/MAS and Homejourney brokers for personalized advice.
What is an HDB Concessionary Loan?
The HDB concessionary loan is a government-backed mortgage for Singapore Citizens buying HDB flats (BTO, resale, executive). Pegged at 0.1% above CPF OA rate (currently 2.6% p.a.), it's reviewed quarterly (Jan/Apr/Jul/Oct)[1][3]. No lock-in means penalty-free early repayment or refinancing.
Key Features of HDB Loans
- Interest Rate: Fixed at 2.6% p.a. (stable, CPF-linked)
- LTV: Up to 75% (new flats), 80% for first-timers under schemes
- Downpayment: 20-25%, fully payable via CPF OA + cash
- Tenure: Up to 30 years or age 65 (whichever shorter)
- Eligibility: SC family nucleus, income ceiling S$14k/month[1][2]
Insider tip: For a S$500k Tampines resale 4-room flat, HDB loan covers S$375k (75% LTV), with downpayment fully from CPF—saving your cash for renovations[2].
What is a Bank Mortgage for HDB Flats?
Bank mortgages for HDB (bank loan HDB) are from MAS-regulated banks like DBS, OCBC, UOB. Rates are fixed (1-5 years) then float on SORA/FDR, often lower initially but riskier[1][3]. Minimum loan S$100k; suits private properties too.
Common Bank Loan Types
- SORA Loans: Pegged to 3M/6M SORA + spread (e.g., SORA + 0.5%)
- Fixed Rate: 2-3 years stable, then reverts
- FDR/FHR: Fixed Deposit Rate pegged; see Fixed Deposit Pegged Home Loan Explained: Bank Rate Comparison Guide | Homejourn... ">Fixed Deposit Pegged Guide[1]
Homejourney lets you compare DBS vs OCBC vs UOB rates live at https://www.homejourney.sg/bank-rates.
HDB Loan vs Bank Loan: Key Differences Table
Here's a HDB loan vs bank loan comparison for quick scanning:
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | 2.6% fixed (CPF OA +0.1%) | 2.2-3% (promo/fixed, then SORA) |
| Downpayment | 20-25% (0-5% cash, rest CPF) | 25% (min 5% cash) |
| LTV Limit | 75-80% | 75% |
| Lock-in | None | 2-3 years |
| Early Repay Penalty | None | 1.5% of loan |
| Eligibility | SC, income <S$14k | Credit score, TDSR |
Data from HDB/CPF/MAS 2026[1][2][3]. For S$400k flat, bank saves on rates but HDB eases cash flow.
HDB Loan Interest Rate vs Bank Rates in 2026
HDB loan interest rate is stable at 2.6% p.a., immune to SORA spikes[1]. Bank rates: 3M SORA ~2.8% +0.3-0.7% spread = ~3.1-3.5% post-promo[1][4]. Fixed packages from DBS/OCBC start at 2.2% for 3 years.
SORA (Singapore Overnight Rate Average) is the key benchmark post-SIBOR[3]. The chart below shows recent interest rate trends in Singapore:
As seen, SORA fell to ~2.8% in late 2025, making banks attractive now—but expect 3-3.5% in 2026 per MAS outlook[4]. Track live on Homejourney.
2026 Rate Projections
Eligibility: Who Qualifies for Which Loan?
HDB: Singapore Citizen family, household income ≤S$14,000/month, no prior property ownership (first-timer perks)[1]. No credit check beyond basics.
Banks: Good credit (CTOS), TDSR ≤55% (debt payments ≤55% income), age 21-65. PRs/foreigners eligible[2]. Use Homejourney's eligibility calculator for TDSR simulation.
Top Bank Loans for HDB: DBS, OCBC, UOB & More
Compare partners on Homejourney. Example for S$300k HDB loan, 25-year tenure:
| Bank | Promo Rate (3Y) | Post-Promo | Monthly ~S$ |
|---|---|---|---|
| DBS | 2.2% | SORA+0.6% | S$1,350 |
| OCBC | 2.3% | SORA+0.5% | S$1,360 |
| UOB | 2.25% | SORA+0.55% | S$1,355 |
| HSBC | 2.4% | FDR-based | S$1,370 |
Rates as of Feb 2026; verify on Homejourney bank rates[1]. Others: Standard Chartered (flexible fixed), Maybank (low spread).
Bank Pros/Cons
- DBS: Best app, fast Singpass approval; con: higher penalties[1]
- OCBC: Low rates for HDB; great refinancing[2]
- UOB: Stable for upgraders; con: stricter TDSR[3]
Pros and Cons: Which Loan Better for HDB?
Which loan better HDB? HDB for safety (no fluctuations, easy eligibility); bank for savings if rates drop[4].
| Scenario | Better Choice |
|---|---|
| First-timer, low cash | HDB (0% cash down) |
| Good credit, rates low | Bank (lower rate) |
| Plan to refinance | HDB (no lock-in) |
Real Calculations: HDB vs Bank Examples
S$500k 4-room Punggol resale, 25-year tenure, S$10k/month income.
- HDB: Loan S$375k (75% LTV), monthly S$1,780 @2.6%, total interest S$259k
- Bank (DBS): Loan S$375k, monthly S$1,680 initial @2.2%, ~S$1,850 post @3.3%, total ~S$240k (if refi smart)
Savings: S$19/month initial, but risk higher later. Test on Homejourney calculator[1][4].
Refinancing: Switch HDB to Bank Loan?
No penalty from HDB; ideal if bank rates <2.6%. Costs: S$2-3k legal fees. 2026 tip: Refi post-lock-in when SORA dips[4]. Link to Types of Home Loans Singapore: Complete Comparison via Homejourney ">Types of Home Loans.
How Homejourney Makes It Safe and Simple
Homejourney verifies rates from all banks, uses Singpass for fast apps. Features:
- Compare HDB vs all banks at bank-rates
- Multi-bank apply: One form, best offers
- Search HDB flats in budget: property search
- Mortgage brokers for free advice
Post-purchase: Aircon Services ">aircon services for maintenance.
FAQ: Common Questions on HDB Loan vs Bank Loan
Q: What is the current HDB loan interest rate 2026?
A: 2.6% p.a., pegged to CPF OA +0.1%[1].
Q: HDB loan vs bank loan downpayment?
A: HDB 20-25% (mostly CPF); bank 25% (5% cash min)[2][3].
Q: Can I take bank loan for HDB flat?
A: Yes, if TDSR passes; compare on Homejourney[1].
Q: Which is cheaper long-term?
A: Banks if rates stay low; HDB for certainty[4].
Q: How to apply via Homejourney?
A: Visit bank-rates, Singpass login, submit once—banks compete[2].
Ready? Start with Homejourney bank rates for trusted, verified guidance. Your safe property journey begins here.
