HDB Home Loan Guide
- Choosing the Right Financing Option for Your Flat
When buying a new BTO or resale flat in Singapore, choosing the right HDB home loan (also known as the HDB concessionary loan) is one of the most important financial decisions you’ll make.
This guide helps you understand everything you need to know — from HDB loan interest rates (currently 2.6%), CPF usage, downpayment rules, and loan eligibility, to how it compares with bank mortgage loans.
We’ll also cover key differences between an HDB loan and a bank loan, who qualifies for each, and when refinancing may make sense down the road. Whether you’re a first-time buyer or upgrading to a resale flat, this page will help you decide confidently how to finance your home.
What is a HDB Home Loan (HDB Concessionary Loan)
A HDB Home Loan, also known as the HDB Concessionary Loan, is a housing loan provided directly by the Housing & Development Board (HDB) to help eligible Singaporean buyers finance their new or resale flat. Unlike a bank loan that is pegged to market-based interest rates such as SORA, the HDB loan offers stability and predictability, making it popular with homeowners who prefer simplicity and consistent repayments.
Key Features of a HDB Home Loan
- Interest rate: Currently fixed at 2.6% per annum (see section on HDB Home Loan Interest Rate for more details)
- Loan Tenure: Up to 25 years, or until the youngest borrower turns 65 (whichever is shorter)
- No lock-in period, allowing borrowers to refinance to a bank loan anytime.
- Repayments can be made using CPF OA savings, cash, or a combination of both.
- Early repayment without penalties, offering flexibility for homeowners to clear their mortgage faster.
Current HDB Home Loan Interest Rate
The current HDB home loan interest rate is 2.6% per annum, and it has remained unchanged since 1999. This rate is pegged at 0.1% above the prevailing CPF Ordinary Account (OA) interest rate, which means it only changes if CPF OA interest is revised. Because the CPF OA rate has been stable for decades, the HDB loan effectively functions as a fixed-rate mortgage - your monthly repayments stay consistent throughout the tenure, regardless of market movements
In contrast, bank loans in Singapore offer both fixed and floating-rate packages. Fixed-rate bank loans typically guarantee the same interest rate for the first 1 to 3 years, after which they convert to a floating rate pegged to market benchmarks like the 3-Month Compounded SORA. Floating-rate packages, on the other hand, move directly in tandem with SORA or the bank’s internal rate. This means borrowers may benefit from lower rates when the interest rates drops.
Summary of Rate Types
| Loan Type | Rate Nature | Typical Benchmark | Rate Movement |
|---|---|---|---|
| HDB Home Loan | Fixed (2.6% p.a.) | CPF OA + 0.1% | Stable - rarely changes |
| Bank Loan | Floating / Fixed for 1-3 years | 3M SORA or internal bank rate | Changes with market trends |
As a result, the HDB concessionary loan offers long-term stability and predictability, making it ideal for homeowners who prefer the stability of knowing their monthly instalments will remain consistent. However, bank loans can offer greater flexibility and potential savings, especially for borrowers who actively monitor market trends or plan to capitalise on refinancing incentives when interest rates fall.
Comparison: HDB 2.6% vs Bank Floating & Fixed Rates
Homeowners today may find lower fixed or SORA-pegged packages that may translate to substantial savings. Compare HDB's 2.6% home loan with today’s bank fixed and SORA-pegged rates - see the latest HDB bank loan offers; or explore ways to refinance your HDB loan for better savings.
Comparing HDB vs Bank Loan
- Which Should You Choose?
When purchasing your flat, one of the most important financial decisions you’ll make is whether to take an HDB home loan or a bank loan. Both options have their advantages and trade-offs — from interest rates and downpayment rules to eligibility, flexibility, and refinancing potential.
The table below highlights the 10 key differences between an HDB loan and a bank loan in Singapore, helping you decide which option fits your budget, risk tolerance, and long-term goals
10 Key Differences Between a HDB Home Loan and Bank Loan
| Comparison | HDB Loan | HDB Bank Loan | |
|---|---|---|---|
| 1. | Interest Rate | Current Concessionary Rate: 2.6% - Pegged at 0.1% above prevailing CPF Ordinary Account (OA) interest rate. This rate has remained unchanged for more than 20 years | Interest rates fluctuate based on market conditions. Both fixed-rate and floating-rate home loan packages are available from banks. |
| 2. | Downpayment | 25% of purchase price - For resale flats, apart from the option fees that has to be in cash, the bulk of the downpayment can be paid by CPF OA funds. | 25% of purchase price - Minimum 5% in cash; the remaining 20% can be paid via CPF OA funds. |
| 3. | Maximum Home Loan or Loan-To-Value (LTV) | - New flats: Up to 75% of purchase price - Resale flats: Up to 75% of resale price or valuation, whichever is lower ^ - If the remaining lease of the flat does not cover the youngest applicant to age 95 or above, the LTV limit will be pro-rated from 75%. | - New flats: 75% of purchase price - Resale flats: 75% of purchase price or valuation, whichever is lower. |
| 4. | Minimum Loan | None | Usually $100,000 |
| 5. | CPF Ordinary Account (OA) Usage | Only allowed to keep up to $20,000 in CPF OA Any funds in excess of $20,000 in your OA must be utilised towards the flat purchase. | No restrictions on keeping any amount in CPF OA as buffer or for other purposes. |
| 6. | Eligibility / Restrictions | - Requires at least 1 Singapore Citizen buyer (Singapore Permanent Resident (SPR) household is not eligible) - Can only apply maximum 2 times. - From 24 August 2026, the household income ceiling for an HDB housing loan is S$16,000 for families (S$24,000 for extended families, with each family nucleus capped at S$16,000; S$8,000 for eligible singles under the Single Singapore Citizen Scheme; S$16,000 for eligible applicants under the Joint Singles Scheme)* - Must not own or have disposed of any private residential property in the past 30 months before the date of application for a HDB Flat Eligibility Letter (HFE) | – No citizenship restrictions as long as the buyer is eligible to purchase an HDB flat. – Creditworthiness (good credit score and stable income) is typically required by banks. |
| 7. | Loan Tenure | Maximum 25 years | Maximum 30 years |
| 8. | Conveyancing Option | Possible to engage HDB conveyancing services, which is generally more affordable. | Only private law firms may handle the conveyancing. Costs are higher, but buyers or sellers don’t need to attend completion appointments at HDB in person. |
| 9. | Refinancing | Can refinance HDB loan to a bank loan if preferred. | Cannot refinance back to HDB Loan. Normal repricing or switching of banks (refinance HDB bank loan) is possible. |
| 10. | Repayment Flexibility / Lock-in Period | No penalty for early redemption/repayment. | Typically 1.5% of the outstanding loan amount if redeemed during the lock-in period. However, many banks do offer partial prepayment options to attract borrowers. Always check with us before applying. |
* For singles, the applicable income ceiling for flat purchase and housing grants depends on the flat type and scheme. The S$8,000 ceiling applies to a new 2-room Flexi flat on a 99-year lease, a resale HDB Standard Flat bought with the Singles Grant under the Single Singapore Citizen (SSC) Scheme, and a resale 2-room Prime Flat with or without the Singles Grant. A S$16,000 ceiling applies to a new 2-room Flexi Flat on a short lease, a resale Plus Flat bought without the Singles Grant, and eligible Joint Singles Scheme (JSS) applicants where applicable.
For the HDB housing loan itself, the revised income ceiling is S$8,000 for SSC applicants and S$16,000 for JSS applicants.
For full details, refer to HDB's official announcement on the revised income ceilings.
While HDB home loan offers stability with its fixed 2.6% concessionary rate, a bank loan can provide greater savings and flexibility — especially when rates are low or if you plan to refinance later. The best choice depends on your financial comfort and goals.
Thinking of Refinancing Your HDB Loan?
If you’re considering switching, read our HDB Refinance Guide to see if it makes sense for you. Or reach out to us to for your personalised assessment! No obligations, just expert advice!
Should You Take a Bank Loan or a HDB Loan? - Practical Considerations
Deciding between an HDB housing loan and a bank loan for your HDB flat is more than just comparing interest rates - Your decision should align with your financial goals, risk tolerance, financial situations and property aspirations.
Some key points to consider:
- If you are working with a tighter cash budget, taking up a HDB loan may be more suitable. It requires lower cash downpayment and offers stable repayments pegged to the CPF Ordinary Account (OA) rate. This makes it easier for first-time buyers to plan their monthly expenses. It also offers the flexibility to convert to a HDB bank loan at a later stage.
- Bank loans, on the other hand, may appeal to those who wish to take advantage of lower interest rates and is able to handle market fluctuations. Use our HDB Refinance Calculator to estimate cost savings when switching to a different loan package.
- Buyers who has already taken a HDB loan (second HDB loan): Some flat buyers may be more suited to get a bank loan when they are applying for a HDB housing loan the second time as there are conditions to it: at the time of writing, HDB only allows buyers who are applying the second HDB loan to retain $25,000 or 50% of the cash proceeds (whichever is higher). If you choose to take up a bank loan, you can get full cash proceeds and this can be a significant amount. The cash proceeds can be used to pay for renovations or furnishings as opposed to taking on a renovation loan which incurs much higher interest.
Have A Question On Your Mortgage?
Every homeowner’s situation is unique, and HDB policies evolve over time. For clear, tailored advice on the right home loan, speak with a LoanSaver mortgage advisor. We’ll assess your finances, compare options, and guide you toward the best choice — chat with us on WhatsApp for a free consultation!
Eligibility Criteria for HDB Home Loan
Before you apply for a HDB Home Loan, you’ll need to meet specific eligibility criteria. If you are considering upgrading from an HDB flat to an executive condominium, there are a different set of EC eligibility rules. Here’s a quick overview of who qualifies for a HDB concessionary home loan:
Aug 2026 Update: HDB Loan Income Ceilings Revised
From 24 August 2026, households submitting a new HDB Flat Eligibility (HFE) letter application are assessed under revised income ceilings for HDB housing loans.
The changes increase the income limits for eligible families and singles, allowing more households to qualify for an HDB concessionary loan. See the Income Ceiling criteria below for the applicable limits.
Citizenship & Household Composition
- At least one applicant must be a Singapore Citizen (SC).
- The other applicant(s), if any, must be Singapore Citizens or Permanent Residents (PRs) forming a family nucleus with the main applicant.
- Singles aged 35 and above buying a flat under the Single Singapore Citizen Scheme are also eligible.
Property Ownership Rules
- You must not own or have disposed of any private property (local or overseas) within the last 30 months.
- You can only hold one HDB flat at a time.
Income Ceiling
For HFE letter applications submitted on or after 24 August 2026, the revised gross monthly household income ceilings for an HDB housing loan are:
- $16,000 for families
- $24,000 for extended families, with each family nucleus capped at $16,000
- $8,000 for eligible singles under the Single Singapore Citizen (SSC) Scheme
- $16,000 for eligible applicants under the Joint Singles Scheme (JSS)
Details of the changes can be found on HDB's website:
Increase in Income Ceilings and Greater Support for Families with Children.
Loan History
- You can take up to two HDB concessionary loans in your lifetime.
- If you’ve already taken two, your next flat purchase must be financed through a bank loan.
Age and Tenure
- Applicants must be at least 21 years old.
- The loan tenure can be up to 25 years, or until the youngest borrower turns 65, whichever is shorter.
HDB Flat Eligibility (HFE) Letter
Before applying for a HDB Home Loan, all buyers must first obtain an HDB Flat Eligibility (HFE) letter.
This letter confirms your eligibility to buy a flat, the type of housing loan you qualify for (HDB or bank), and the maximum home loan amount you can receive.
You can apply for your HFE letter through the My HDBPage portal using Singpass - it’s a mandatory step before you can book a flat, obtain a loan, or sign any Agreement for Lease.
From 24 August 2026, new HFE applications are assessed under the revised income ceilings. Existing valid HFE letters that already confirm eligibility remain unaffected. If an existing or pending HFE application was assessed under the previous ceiling and the household wants to be considered under the revised ceiling, HDB requires a new HFE application.
For full details, visit the HDB Housing Loan Eligibility page: https://www.hdb.gov.sg/residential/buying-a-flat/understanding-your-eligibility-and-housing-loan-options/housing-loan-options/housing-loan-from-hdb
Who Is Not Eligible for HDB Loan
(and Must Take a Bank Loan)
Not everyone qualifies for an HDB concessionary loan. If you’ve previously owned private property, exceed the income ceiling, or already taken two or more HDB loans, you’ll need to finance your flat with a bank loan instead.
👉 Learn more in our HDB Bank Loan Guide — including the latest interest rates, downpayment requirements, and exclusive bank promotions.
Downpayment, CPF Usage, & Loan-to-Value (LTV) Limit
Once you’re clear about your HDB loan eligibility, it’s equally important to understand how much downpayment and CPF you can use, and how the Loan-to-Value (LTV) limits affect your home financing options.