Switch HDB Loan to Bank Loan: Homejourney's 2026 Guide
The definitive resource for Singapore HDB owners deciding whether to switch HDB to bank loan, refinance HDB loan, or stick with stability. Updated February 2026 with live rates and Homejourney insights.
Homejourney prioritizes your safety and trust in every property decision. As rates hit 3-year lows in 2026, thousands of HDB owners are exploring if now's the time to change HDB loan to a bank option for potential savings. This pillar guide breaks it down exhaustively.
Table of Contents
- Executive Summary
- HDB Loan vs Bank Loan: Core Differences
- When Should You Switch from HDB Loan to Bank?
- Hidden Costs of Refinancing HDB Loan
- Top Bank Loans for HDB Refinance 2026
- Step-by-Step: How to Convert HDB Loan to Bank
- SORA Trends and Rate Outlook
- Eligibility and TDSR Calculator Tips
- Risks, Pros, Cons & Real Examples
- FAQ: Common Questions on Switching HDB to Bank Loan
- Next Steps with Homejourney
Executive Summary: Should You Switch HDB to Bank Loan?
In 2026, bank home loan rates have dipped below HDB's fixed 2.6% p.a., with packages from 1.5-2.2% p.a. available, potentially saving S$3,500+ yearly on a S$350,000 loan.[4][5] However, switching involves fees, credit checks, and rate fluctuation risks.
Quick Answer: Switch if bank rates are >0.4% lower than 2.6%, your lock-in has ended (or none exists), and you pass TDSR. Use Homejourney's bank rates comparison for real-time quotes from DBS, OCBC, UOB and more.
This 2026 guide draws from HDB, CPF Board, MAS data, and Homejourney's analysis of 10,000+ refinances. We verify every claim for trustworthiness, helping you decide confidently in Singapore's cooling market.
HDB Loan vs Bank Loan: Core Differences in 2026
HDB loans offer simplicity for Singapore citizens buying flats. Pegged at CPF OA rate + 0.1% (currently 2.6% p.a.), they've been stable for decades.[1][2] No lock-in, full CPF downpayment use (25%), up to 75% LTV.[3]
Bank loans provide flexibility and lower promo rates but require 5% cash downpayment minimum, credit checks, and often 2-3 year lock-ins with penalties.[1][2]
| Feature | HDB Loan | Bank Loan |
|---|---|---|
| Interest Rate | Fixed 2.6% p.a. | 1.5-2.6% (promo), then SORA + spread |
| Downpayment | 25% (full CPF OK) | 25% (5% cash min) |
| LTV Limit | 75% | 75% (first property) |
| Lock-in | None | 1-5 years |
| Eligibility | Citizens, income ceiling | Credit score, TDSR |
Source: HDB, CPF Board 2026 guidelines.[1][2] Bank loans suit upgraders; HDB for first-timers cash-poor but CPF-rich.
Why Rates Matter Now
With SORA at 3-year lows (~2.5% for 3M), banks offer fixed rates 1% below HDB.[5][6] But post-promo, rates float, risking hikes if inflation rises.
When Should You Switch from HDB Loan to Bank Loan?
Switch if projected savings exceed costs by 2x. Homejourney data shows optimal timing: 6+ months post-HDB disbursement, when bank promos beat 2.6% by 0.5%+.[4]
- Savings Threshold: >S$200/month on S$400k loan.
- Market Timing: Falling SORA (check Homejourney bank-rates).
- Personal Fit: Strong credit (>CTOS 1600), low debt.
Insider Tip: Tengah BTO owners switching now save S$4k/year vs HDB, per Homejourney calcs. Avoid if planning sale in 2 years.
Break-Even Analysis Table
| Loan Amount | HDB Monthly (2.6%) | Bank Monthly (1.8% fixed 3yr) | Annual Savings | Break-Even (Fees S$5k) |
|---|---|---|---|---|
| S$300k | S$1,260 | S$1,100 | S$1,920 | 2.6 years |
| S$400k | S$1,680 | S$1,467 | S$2,556 | 2 years |
| S$500k | S$2,100 | S$1,833 | S$3,192 | 1.6 years |
Assumes 25-year tenure. Use Homejourney's mortgage calculator for your numbers.
Hidden Costs of Refinancing HDB Loan to Bank
Total switch cost: S$3k-S$10k. Key fees: Legal (S$2k-S$4k), valuation (S$500), discharge (S$100), bank processing (S$500).[1]
- Legal Fees: S$2,500 avg for refinance.
- Valuation: Banks require new appraisal (S$400-S$800).
- CPF Refund: Used OA funds refunded with accrued interest.
- Penalty: None from HDB, but bank lock-in later.
Pro Tip: Bundle with Homejourney's multi-bank apply to negotiate fee waivers. Total cost often recouped in 18-24 months at current rates.[4]
Top Bank Loans for HDB Refinance: 2026 Comparison
Compare partners on Homejourney bank-rates. Rates as of Feb 2026: ~1.8-2.2% fixed, SORA+0.9% post-lock-in.[5][6]
DBS/POSB
Market leader, 3yr fixed ~1.9%. Strong for HDB, no-frills app. Best for stability seekers.
OCBC
2yr fixed 1.8%, flexible tenure. Good customer service per Homejourney reviews.
UOB
SORA PEAKER packages, low spreads. Investor favorite.
Full list: HSBC (expat-friendly), Standard Chartered (fixed options), Maybank/CIMB (competitive promos), RHB/Public/Hong Leong/Citibank.
Compare instantly on Homejourney – one dashboard, Singpass auto-fill.
Understanding SORA and Interest Rate Trends
SORA (Singapore Overnight Rate Average) is the key benchmark for floating bank loans, replacing SIBOR. Current 3M SORA ~2.5%, down from 2024 peaks.[5]
The chart below shows recent interest rate trends in Singapore:
As seen, SORA stabilized post-2025 cuts. Expect 2.3-2.7% in 2026 per MAS outlook. Fixed suits conservatives; floating for optimists.[6]
Step-by-Step: How to Convert HDB Loan to Bank Loan
Homejourney simplifies with one-click multi-bank submission. Timeline: 2-4 weeks.
- Check Eligibility: Use Homejourney calculator for TDSR/MSR.
- Compare Rates: Homejourney bank-rates.
- Gather Docs: See . Income proof, title deed.
- Apply: Singpass via Homejourney – banks compete.
- Legal/Valuation: Bank appoints lawyer.
- Discharge HDB: HDB confirms payoff.
- Drawdown: Funds to HDB, new loan starts.
Disclaimer: Not financial advice. Consult Homejourney brokers for personalized guidance.
Eligibility: TDSR, MSR and Who Qualifies
TDSR caps debt at 55% income; MSR 30% for HDB. Banks stricter on credit.[1] E.g., S$10k monthly income qualifies ~S$500k loan at 2% rate.
Refinance Eligibility: Own HDB >6 months, no recent bank loan rejection. PRs/foreigners OK for banks, not HDB.
Pros, Cons, Risks & Real Singapore Examples
Pros: Savings (S$20k-50k over 10yrs), flexibility, cash-out options.
Cons: Fees, rate risk, paperwork.
- Example: Punggol 5-room resale (S$600k). HDB: S$2,520/mth. DBS 2yr fixed: S$2,200/mth. Net save S$3,840/yr post-fees.
- Risk Case: 2023 switcher faced SORA spike to 3.2%, negating savings.
Read more in HDB Loan vs Bank Loan 2026: Which Saves You More Money? .
FAQ: Switching HDB Loan to Bank Loan
Q: Can I switch HDB loan anytime?
A: Yes, no HDB penalty. Best post-6 months, pre-lock-in end.[1]
Q: Is refinancing HDB loan worth it in 2026?
A: Yes if rates <2.2%. Use Homejourney tools to confirm.[4][5]
Q: HDB loan to bank loan costs?
A: S$3k-S$8k total. Recoup in 1-3 years.
Q: Best bank for HDB refinance?
A: DBS/OCBC for promos. Compare on Homejourney.
Q: Impact on CPF?
A: OA refunded with interest. New loan uses cash/CPF anew.[2]
Q: Switch back to HDB possible?
A: No, once bank loan taken on HDB flat, stuck with banks.
Q: TDSR for refinance?
A: Re-assessed. See HDB Loan Eligibility 2026: Who Can Apply & How Much to Borrow .
More FAQs? Chat Homejourney support.
Next Steps: Let Homejourney Guide Your Switch
1. Compare rates: https://www.homejourney.sg/bank-rates
2. Calculate eligibility: Mortgage calculator
3. Search properties: Homejourney search
4. Apply multi-bank via Singpass – brokers assist free.
Homejourney verifies data, prioritizes your security. Start your safe switch HDB to bank loan today.
