Financing an HDB resale flat in Singapore is one of the biggest financial decisions you will ever make. Getting it wrong can lock you into higher monthly repayments for decades; getting it right can save you well over six figures over your loan tenure while keeping your family financially safe.
This complete guide to HDB resale financing is written for Singapore buyers who want clear, practical and trustworthy advice. Drawing on current HDB and MAS rules, real resale prices across estates like Tampines, Queenstown and Sengkang, and years of working with buyers on the ground, Homejourney breaks down every step: from eligibility, CPF usage and grants, to choosing between an HDB loan and a bank resale flat loan, to planning your resale flat payment timeline safely.
Throughout this guide, we will show you how to use Homejourney’s tools – from live bank rate comparisons to instant affordability calculators – so you can make confident, well‑informed decisions without guesswork.
Table of Contents
- 1. HDB Resale Flat Financing at a Glance (Quick Overview)
- 2. Key Concepts & Rules: How HDB Resale Financing Works
- 3. HDB Loan vs Bank Loan for Resale HDB (2025 Rules)
- 4. CPF Usage, Grants & Cash: Structuring Your Payment
- 5. Step‑by‑Step Financing Timeline for an HDB Resale Flat
- 6. Sample Calculations: How Much Can You Borrow & Pay Monthly?
- 7. Advanced Topics: TDSR, MSR, SORA Loans & Refinancing
- 8. Safety, Common Pitfalls & How Homejourney Protects Buyers
- 9. FAQs: HDB Resale Financing Questions Singapore Buyers Ask
- 10. Next Steps: Plan Your Resale Flat Loan with Homejourney
1. HDB Resale Flat Financing at a Glance
When you buy an HDB resale flat, your financing usually comes from three main sources:
- Loan – either an HDB concessionary housing loan or a bank HDB resale mortgage[1][2]
- CPF OA – your CPF Ordinary Account savings for down payment, stamp duties and monthly instalments[1]
- Cash – for portions CPF cannot cover (e.g. minimum cash downpayment for bank loans, cash over valuation, legal fees)
In 2025, most Singaporeans still finance their resale HDB through either:
- HDB loan – up to 80% Loan‑to‑Value in past years but now up to 75% of the lower of valuation or price, at a concessionary rate typically 0.1% above CPF OA (currently about 2.6% p.a.)[1][2]
- Bank loan – up to 75% LTV, with at least 5% cash downpayment and 20% CPF/cash, at market rates often pegged to 3‑month or 6‑month SORA
Featured Snippet: HDB Resale Flat Financing in One Table
Homejourney helps you see exactly how these options affect your monthly repayments – and which combination of loan, CPF and cash gives you the safest buffer for your household.
2. Key Concepts & Rules: How HDB Resale Financing Works
2.1 HFE Letter: Your Starting Point
Since 2023, the old HLE (HDB Loan Eligibility) letter and separate grant assessments have been consolidated into the HDB Flat Eligibility (HFE) letter.[1] You must have a valid HFE before you can exercise an Option to Purchase (OTP) for a resale flat.
The HFE letter tells you:
- Whether you are eligible to buy an HDB resale flat
- Whether you qualify for an HDB loan, and the maximum HDB resale loan amount[1]
- Which CPF housing grants you qualify for (e.g. Enhanced CPF Housing Grant, Proximity Housing Grant)[1]
- Your income assessment window and household structure
You apply for the HFE directly via HDB’s portal using Singpass. Processing usually takes about 21 working days, but during peak periods it can stretch longer – plan ahead before house‑hunting seriously.
2.2 Market Value, Resale Price & Cash Over Valuation (COV)
For resale flats, there are two key numbers:
- HDB valuation – assessed market value of the flat
- Agreed resale price – what you and the seller sign in the OTP
Your maximum loan (HDB or bank) and CPF usage are based on the lower of the valuation or resale price.[1] If you pay above valuation, the difference is called Cash Over Valuation (COV) and must be in cash only (no CPF, no loan coverage).
Example from the ground: In estates like Kallang/Whampoa or Queenstown where demand is strong, it is still common to see COV, especially for nicely renovated or high‑floor units within 5 minutes’ walk of MRT. In outer towns like Punggol or Sembawang, COV is less common but still occurs for well‑located units near malls or schools.
2.3 Remaining Lease & CPF Usage
For older resale flats, CPF usage is tied to the remaining lease and the age of the youngest buyer.[1]
- CPF cannot be used if remaining lease is under 20 years[1]
- To use full CPF up to the Valuation Limit, the remaining lease must cover the youngest buyer to at least age 95[1]
- If the lease falls short, CPF usage is prorated, and you may need more cash or a smaller loan
In practical terms: if you are 35 and looking at a 40‑year‑old flat in Bukit Merah with 59 years left, you can generally still use CPF fully. But if you are 40 buying a 50‑year‑old flat with 49 years left, CPF usage will be restricted and you must be prepared for more cash outlay. Homejourney’s affordability calculator helps you model these scenarios quickly.
2.4 Regulatory Framework: MAS, HDB & CPF Board
Your HDB resale mortgage must comply with multiple layers of rules:
- HDB: flat eligibility, ethnic quota, citizenship, HFE letter, HDB loan criteria, resale procedures
- MAS: Loan‑to‑Value (LTV) limits, Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) for residential property loans
- CPF Board: how much CPF OA you can use and refund rules
For resale HDB flats, the stricter ratio is usually MSR – your total mortgage instalments cannot exceed a set percentage of your gross monthly income. TDSR also applies, but MSR often bites first for HDB buyers because it is more conservative.
3. HDB Loan vs Bank Loan for Resale HDB (2025 Rules)
Almost every buyer asks: “Should I take an HDB loan or a bank loan to buy a resale HDB loan wise?” The answer depends on your income stability, risk tolerance, and long‑term plans.
3.1 HDB Loan – Stability and Flexibility
The HDB concessionary loan is popular with first‑time buyers who prefer certainty and flexibility.[1][2]
- Interest rate: Typically 2.6% p.a., pegged at 0.1% above the prevailing CPF OA interest rate[2]
- LTV: Up to 75% of lower of valuation or price (if you meet HDB criteria)[1]
- Downpayment: At least 20%, which can be fully from CPF OA (after paying the initial option/ deposit in cash)[1]
- Tenure: Up to 25 years, subject to age and lease
- Prepayment: No penalty if you partially or fully repay early
Who typically benefits from HDB loan?
- Young couples working in stable but moderate‑income jobs
- Households with variable or commission‑based income (e.g. insurance agents, property agents, sales roles)
- Families who want the assurance that instalments will not spike suddenly
Local insight: For many families in estates like Yishun or Jurong West, the ability to fully service monthly instalments from CPF OA without cash top‑ups is a major psychological relief. Even when bank floating rates dip below 2.6%, the peace of mind from a fixed HDB rate is often worth it.
3.2 Bank Loan – Potential Savings, More Complexity
Bank loans for HDB resale flats are offered by major banks such as DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank. They follow MAS regulations but differ in rates and package structures.
- LTV: Up to 75%, subject to TDSR and credit assessment[3]
- Minimum cash downpayment: 5% of purchase price must be paid in cash[3]
- Remaining 20%: CPF OA and/or cash
- Interest structures:
- Floating packages pegged to 3‑month or 6‑month SORA plus a spread
- Fixed rates (e.g. fixed for 2–5 years, then revert to floating)
- Occasional hybrid packages (part fixed, part floating) depending on bank
Bank loans can be cheaper than 2.6% at certain points in the interest rate cycle, but they can also go significantly higher. That is why monitoring SORA and repricing or refinancing at the right time is critical. Homejourney’s real‑time SORA tracking and refinancing journey help you avoid being trapped in an expensive package.
