Hong Leong Finance vs Bank Mortgage Comparison Rates and Fees Explained
Hong Leong Finance offers competitive fixed rates starting at 1.85% p.a. for the first 3 years on HDB loans above S$500,000, but banks like DBS and OCBC provide lower rates from 1.30%-1.35% with SORA-pegged options.[2][1]
This cluster article breaks down the key differences in rates, fees, and suitability for Singapore homebuyers, helping you decide between a finance company like Hong Leong Finance mortgage and traditional bank mortgages. For comprehensive coverage, see our pillar guide on Singapore Home Loan Comparison Guide. At Homejourney, we prioritize your safety with verified rates and multi-bank applications.
Hong Leong Finance Overview: Alternative Lender for HDB and Private Properties
Hong Leong Finance, a licensed finance company in Singapore, specializes in HDB home loans and private property financing as an alternative lender. Unlike banks, it pegs rates to HDB Home Rate (HHR at 7.00% p.a.) or Private Property Rate (PPR at 6.15% p.a.), offering stability for risk-averse buyers.[2][5][6]
Key products include 3-year fixed HDB loans at 1.85% p.a. (then HHR - 3.50% at 3.50%), suitable for HDB upgraders or resale flats. Minimum loan S$500,000 applies, with no public SORA options listed.[2] This positions Hong Leong as a strong choice for borrowers ineligible for bank loans due to debt servicing ratios.
Bank Mortgage Overview: DBS, OCBC, UOB and More
Major banks like DBS, OCBC, UOB, HSBC, and Standard Chartered dominate with SORA-pegged floating rates from 1M SORA + 0.25% (effective ~1.43%) and fixed rates as low as 1.30%-1.35% for loans above S$500k-$2M.[1][3]
Banks offer flexibility with free conversion (FC12/24) after lock-in (typically 2 years) and sale penalty waivers. For example, DBS leverages its SGD funding for competitive fixed rates, while OCBC suits high-value loans with rebates up to S$2,800.[1] Use Homejourney's bank rates page to compare real-time rates from these partners.
Rates Comparison: Hong Leong Finance vs Banks (December 2025)
Current rates favor banks for aggressive pricing, but Hong Leong provides longer fixed periods. Here's a side-by-side for HDB/Completed Private Property loans above S$500k:
| Period | Hong Leong Finance (HDB) | Top Banks (e.g., DBS/OCBC) |
|---|---|---|
| Year 1-2 | 1.85% Fixed[2] | 1.30%-1.35% Fixed or 1M SORA+0.25% (~1.43%)[1][3] |
| Year 3 | 1.85% or 3.50% (HHR-3.50%)[2] | 1.50% Fixed or 3M SORA+0.50%[1] |
| Thereafter | 3.50%[2] | 3M SORA + 0.60%-3.00%[1] |
| Lock-in | 2-3 Years | 2 Years |
Note: Rates as of Sep-Dec 2025; subject to change. Banks require higher min loans for best rates (S$1M+).[1][2] Track live 3M/6M SORA on Homejourney for timing.
Fees and Charges: Finance Company vs Bank Breakdown
- Processing Fees: Hong Leong ~0.5%-1% of loan; banks similar but often waived for min S$500k loans.[1]
- Lock-in Penalty: 1.5% early redemption; banks offer 50-100% sale waivers, Hong Leong less flexible.[1]
- Legal/Valuation: S$1,500-S$3,000 across both; banks may subsidize for refinancers (S$2,000-S$2,800 rebates).[1]
- Refinance Subsidy: Banks lead with S$2,300+; Hong Leong competitive but check per case.[1][2]
Banks edge out on fees due to promotions, but Hong Leong suits simple HDB loans without complex incentives. Always verify via Homejourney mortgage calculator.
Pros and Cons: When to Choose Hong Leong Finance Mortgage vs Banks
Hong Leong Pros: Longer fixed rates (3 years), HDB-focused, easier approval for self-employed. Ideal for first-time HDB buyers in areas like Punggol or Sengkang needing quick financing.[2]
Hong Leong Cons: Higher post-fixed rates (3.50%), fewer SORA options, limited digital tools vs banks.[2]
Bank Pros: Lowest rates (1.30%), SORA flexibility, rebates, Singpass integration. Best for private condos in Orchard or investors refinancing.[1][3]
Bank Cons: Stricter TDSR (60% debt ratio), higher min loans. Compare UOB vs DBS via our guide.
Application Process and Homejourney Advantages
- Check eligibility on Homejourney calculator (Singpass-enabled).
- Compare rates instantly across DBS, OCBC, UOB, HSBC, Hong Leong Bank, etc.
- Submit one multi-bank application via Singpass – auto-fill docs, get competing offers.
- Processing: 1-3 weeks; Hong Leong faster for HDB (3-7 days).[2]
- Documents: NRIC, income slips, property Option to Purchase.
Homejourney lets banks compete for you, ensuring the best Hong Leong home loan or bank deal. Link to properties in budget via property search.
Actionable Steps for Singapore Buyers
1. Calculate affordability – max LTV 75% banks vs 80% HDB, but finance cos align with HDB rules.[4]
2. If loan >S$1M, prioritize banks for 1.30% rates; under S$500k, test Hong Leong.[1][2]
3. Time repricing post-lock-in when SORA dips (track on Homejourney).
4. For resale HDB in mature estates like Toa Payoh, Hong Leong's fixed stability wins amid volatility.
Disclaimer: Rates fluctuate; consult professionals. Homejourney verifies data for trust.
FAQ
Is Hong Leong Finance mortgage better than banks?
Depends on needs – banks win on rates (1.30% vs 1.85%), Hong Leong on fixed certainty.[1][2]
What are current Hong Leong Finance vs bank rates 2025?
Hong Leong: 1.85% Y1-3; Banks: 1.30%-1.43%. Min S$500k.[1][2]
Finance company vs bank: key fee differences?
Banks offer higher rebates (S$2,800); both ~1.5% penalties.[1]
Can I apply to Hong Leong via Homejourney?
Yes, multi-bank submission includes partners – one app, best offers.
Best for HDB refinancing: Hong Leong or banks?
