Financing your HDB resale flat

HDB loan vs bank loan, which should you choose?

9 min read Verified against hdb.gov.sg and mas.gov.sg, 7 April 2026 No loan affiliation

When buying an HDB resale flat, every first-time buyer has to pick between two loan types: the HDB Concessionary Loan (currently 2.6 percent per annum, pegged at the CPF Ordinary Account rate plus 0.1 percentage points) and a bank housing loan (floating, fixed, or hybrid at the bank's rates). Both carry a 75 percent loan-to-value limit, both require a minimum 5 percent cash downpayment, and both cap your monthly payments through MSR and TDSR. But the eligibility, income ceiling, rate stability, and refinancing path differ in ways that matter. This page lays out the side-by-side comparison, what changed on 20 August 2024, and the trade-offs behind the choice, all sourced from hdb.gov.sg and mas.gov.sg.

Every fact on this page is sourced from hdb.gov.sg or other official Singapore government sites. Citations are listed inline with each step and consolidated at the bottom. Last verified 7 April 2026. Where rules involve discretion (such as MOP waivers), we say so plainly rather than guess.
The short version

HDB loan vs bank loan at a glance

  • HDB Concessionary Loan: 2.6% p.a. (1 Apr–30 Jun 2025, pegged at CPF OA + 0.1%), 75% LTV, stable rate for years, at least one Singapore Citizen required in household.
  • Bank loan: floating / fixed / hybrid at the bank's rates, 75% LTV for first housing loan, TDSR 55%, MSR 30%, stress-test floor 4%.
  • Minimum downpayment either way: 25% (LTV 75% since 20 Aug 2024), of which at least 5% must be cash.
  • You can refinance from HDB to bank, but never from bank back to HDB. One-way door.
  • HDB loan income ceiling: $14,000/mo (5-room and Executive), $21,000/mo (3Gen). Banks set their own credit criteria.

Side-by-side comparison

Feature HDB Concessionary Loan Bank (FI) Loan
Interest rate 2.6% p.a. (1 Apr–30 Jun 2025). Pegged at CPF OA + 0.10%. Has remained at 2.6% for many quarters as the CPF OA rate is stable. Floating (SORA-based), fixed, or hybrid. Varies by bank. Changes with the market.
Maximum LTV 75% (lowered from 80% on 20 Aug 2024) 75% for first housing loan. Lower for borrowers with existing housing loans.
Downpayment 25% minimum. At least 5% in cash, balance from CPF OA. 25% minimum. At least 5% in cash for a first housing loan.
Income ceiling $14,000/mo for 5-room and Executive (families). $21,000/mo for 3Gen (multi-generation). No HDB-imposed ceiling. Banks set their own credit criteria.
MSR cap 30% of gross monthly income 30% of gross monthly income
TDSR cap Not directly applied (HDB uses its own loan eligibility rules) 55% of gross monthly income
Stress-test floor 3% (HDB rule for computing eligible loan amount) 4% medium-term rate floor (raised 0.5pp in Sep 2022)
Citizenship requirement At least one Singapore Citizen in the household None imposed by HDB. Banks set their own rules.
Refinance to bank Yes, allowed at any time, subject to bank approval Not applicable
Refinance back to HDB Not applicable No, once you are on a bank loan, you cannot move back to HDB

Sources: HDB, HDB Loan · MAS, MSR & TDSR rules

The HDB Concessionary Loan in detail

Interest rate and rate stability

2.6% p.a. current CPF OA rate + 0.10% Reviewed quarterly

The HDB Concessionary Loan interest rate is pegged at the CPF Ordinary Account interest rate plus 0.1 percentage points. For the quarter 1 April to 30 June 2025, this worked out to 2.6 percent per annum. Because the CPF OA rate is itself formula-based and has been stable for many years, the HDB rate has remained at 2.6 percent for many consecutive quarters.

HDB reviews and publishes the rate each quarter on its interest rate page. Unlike a bank loan, there is no promotional fixed period, the rate resets each quarter if the CPF OA rate changes, but in practice this has not been a volatile number. For most borrowers the HDB loan functions as a stable long-term rate rather than a floating one.

Source: HDB, Interest Rate

LTV and downpayment

LTV: 75% since 20 Aug 2024 5% minimum cash 20% CPF OA

Since 20 August 2024, the HDB loan LTV is 75 percent, lowered from the previous 80 percent as part of a package of measures to cool the HDB resale market. This means a minimum 25 percent downpayment on the purchase price.

The 25 percent downpayment splits as follows: at least 5 percent must be in cash, and the remaining 20 percent can come from your CPF Ordinary Account savings. The cash portion is paid when you exercise the OTP; the CPF portion is settled at completion alongside the loan drawdown.

Source: HDB press release, 19 Aug 2024 (LTV to 75%)

Eligibility and income ceiling

$14,000/mo (5-room and EA) $21,000/mo (3Gen) Citizenship required

To qualify for an HDB Concessionary Loan, at least one Singapore Citizen must be in the household, and the household must meet the income ceiling for the flat type being purchased. The most commonly quoted ceilings are:

  • $14,000/mo gross household income for families buying 5-room and Executive flats
  • $21,000/mo for 3Gen (multi-generation) flats, which must include at least one child and at least one parent or grandparent

Your HFE Letter is the authoritative document for your eligibility, apply for it first via the HDB Flat Portal, and it will state whether you qualify for an HDB loan and the maximum amount you can borrow. See the HFE Letter step on the buying process page for how to apply.

Source: HDB, Income Guidelines

The bank housing loan in detail

Rate types and how banks price

Fixed / floating / hybrid SORA-based Promotional periods

Banks offer three main rate structures for housing loans: fixed rate (locked in for a promotional period, usually 2 or 3 years, then it reverts to a floating rate), floating rate (pegged to a reference rate such as 3-month SORA, the Singapore Overnight Rate Average), and hybrid (combinations of the two, or a floating rate with a fixed cap).

After the fixed or promotional period ends, the rate reverts to the bank's standard floating rate, which is usually a margin over 3-month SORA. If you plan to refinance at the end of the promotional period, the bank is counting on you staying, refinancing every few years is common practice among bank-loan borrowers.

Because bank rates vary by provider and change with the market, there is no single "bank rate" to compare against the HDB 2.6 percent figure. Check mortgage comparison tools and each bank's current rate page for the specific deal you are looking at.

LTV, MSR and TDSR

LTV: 75% first loan MSR: 30% TDSR: 55%

A bank housing loan for an HDB flat is capped at 75 percent LTV for your first housing loan, the same LTV as an HDB loan. For second and subsequent housing loans, the LTV is lower (and the cash downpayment requirement higher).

Two MAS-set caps apply to bank housing loans on HDB flats:

  • Mortgage Servicing Ratio (MSR), 30 percent. Your HDB flat mortgage payments cannot exceed 30 percent of your gross monthly income. MSR applies only to HDB flats and Executive Condominiums purchased from developers before their MOP ends.
  • Total Debt Servicing Ratio (TDSR), 55 percent. All your property-related debt (this mortgage plus any other property loans) plus 70 percent of your other monthly debt obligations cannot exceed 55 percent of your gross monthly income.

The lower of the two caps is what binds in practice. For an HDB flat purchase with no other property loans and modest other debt, MSR at 30 percent is usually the binding constraint.

Source: MAS, MSR & TDSR rules

Stress-test floor and eligibility

Floor: 4% (from Sep 2022) Not HDB rate Letter of Offer

For computing your eligible loan amount under MSR and TDSR, banks use a medium-term interest rate floor set by MAS, not the actual promotional rate being offered. The residential property floor was raised by 0.5 percentage points in September 2022 to 4 percent. This is what decides how much you can actually borrow.

This is why two identical-looking promotional rates on paper can lead to very different approved loan amounts, the stress-test floor normalises the calculation across rate types and bank promotions. If a bank is quoting you 3 percent today, the eligibility check is still run at 4 percent.

Once the bank approves your application, it issues a Letter of Offer (LO). The LO must be dated on or before your OTP exercise date, so plan the timing carefully when you have a specific flat in mind.

Source: HDB press release, 29 Sep 2022 (stress-test floor increase)

Which one is right for you?

There is no universally correct answer. The trade-off comes down to four considerations:

Rate stability vs potential savings. The HDB loan at 2.6 percent has been stable for years and is unlikely to move far unless the CPF OA rate itself changes. A bank promotional rate can start lower but will reset after the promotional period, and over a 25-year loan the total interest paid depends heavily on where rates move over the whole tenure. If you want to set and forget, HDB is simpler. If you are willing to refinance every few years and chase lower promotional rates, banks may beat HDB over the long run, but only by chasing actively.

The one-way door. You can always refinance from an HDB loan to a bank loan later. You cannot refinance back. This means starting with HDB gives you the option value of switching later, while starting with a bank closes that door forever. For a first-time buyer who is not sure, starting with HDB preserves optionality.

Eligibility. If your household does not include a Singapore Citizen, or your income exceeds the HDB loan income ceiling, you do not have a choice, only bank loans are available. Check your HFE Letter before shopping for rates.

Cash flow. Both HDB and bank loans require the same 25 percent downpayment with a minimum 5 percent in cash. The difference is in the ongoing monthly payment: HDB at 2.6 percent versus whatever the bank is quoting. Run the numbers through a loan calculator for both scenarios before committing.

What changed on 20 August 2024

HDB announced a package of measures to cool the resale market and provide more support for first-time home buyers. Three changes relevant to this page took effect:

If you are reading an older guide, check the date, many pre-Aug 2024 articles still quote the 80 percent LTV or the 80,000 EHG cap, neither of which applies anymore.

Source: HDB press release, 19 Aug 2024

Common questions about HDB and bank loans

The HDB loan rate is pegged at the CPF Ordinary Account interest rate plus 0.1 percentage points. For 1 April to 30 June 2025 this worked out to 2.6 percent per annum, and the rate has remained at 2.6 percent for many consecutive quarters because the CPF OA rate has been stable. Check the HDB interest rate page for the current quarter's figure before committing to a loan, especially if you are reading this several months after April 2026.
75 percent for both an HDB Concessionary Loan and a bank loan (first housing loan), with effect from 20 August 2024. The HDB loan LTV was previously 80 percent. The 75 percent cap means you need a minimum 25 percent downpayment, of which at least 5 percent of the purchase price must be in cash, with the remaining 20 percent from your CPF Ordinary Account.
The income ceiling for families buying 5-room and Executive flats is $14,000 per month gross household income. For 3Gen (multi-generation) flats it is $21,000 per month. Your HFE Letter confirms your exact eligibility and the maximum loan amount HDB will offer you. Bank loans do not have an HDB-imposed income ceiling, but each bank applies its own credit assessment.
MSR (Mortgage Servicing Ratio) caps your HDB flat mortgage at 30 percent of gross monthly income and applies only to HDB flats and Executive Condominiums bought from developers before their MOP ends. TDSR (Total Debt Servicing Ratio) caps all your property-related debt plus 70 percent of your other monthly debt at 55 percent of gross monthly income, and applies to all property loans from banks. HDB Concessionary Loans are not directly subject to TDSR but use HDB-specific eligibility rules. For an HDB flat purchase with a bank loan and no other property debt, MSR is usually the binding cap.
HDB to bank: yes, at any time, subject to the bank's approval. Bank to HDB: no, this is not allowed. Once you take a bank loan, you cannot refinance back to an HDB Concessionary Loan. This one-way door is an important consideration for first-time buyers: starting with HDB preserves the option to switch to a bank later if rates fall, while starting with a bank closes the HDB option forever.
HDB uses a 3 percent floor to compute the eligible loan amount for an HDB Concessionary Loan. For bank housing loans, MAS sets a medium-term interest rate floor of 4 percent for residential property, which was raised by 0.5 percentage points in September 2022. The stress-test floor is the rate used to check whether you can service the loan under a hypothetical higher rate, not the actual rate you will pay each month. It is why two banks quoting identical promotional rates can approve different maximum loan amounts if other parts of your financial profile differ.

Sources and verification

  1. HDB, Housing Loan from HDB
  2. HDB, Interest Rate (current quarter)
  3. HDB, Income Guidelines
  4. HDB, HFE Letter
  5. MAS, MSR and TDSR rules
  6. MAS, Calculating TDSR
  7. HDB press release, 19 Aug 2024 (LTV lowered to 75%, EHG raised)
  8. HDB press release, 29 Sep 2022 (stress-test floor raised)
  9. HDB / CPF, CPF OA interest rate confirmation

All facts on this page were checked against the above sources on 7 April 2026. The HDB loan interest rate is a time-sensitive figure, HDB reviews and publishes it each quarter. Before committing to a loan, always verify the current-quarter rate on hdb.gov.sg and confirm the amounts on your HFE Letter.