The headline numbers

HDB's concessionary loan is currently pegged at 2.6% per annum (0.1 percentage points above the CPF Ordinary Account rate), with a Loan-to-Value (LTV) limit of up to 75%. Bank loans offer variable or fixed packages that can be lower or higher than 2.6% depending on the rate environment, typically with a higher LTV limit of up to 75% as well (though the exact cap depends on the number of outstanding home loans you have).

HDB loan advantages

  • Rate stability — the HDB rate moves slowly and predictably, tied to the CPF OA rate.
  • More forgiving on arrears — HDB has more flexibility than banks in restructuring repayment if you hit financial difficulty.
  • No penalty for early/partial redemption in most cases.

Bank loan advantages

  • Potentially lower rates when the interest rate environment is favourable, especially fixed-rate packages during low-rate periods.
  • More product variety — different lock-in periods, cash rebates, and packages tailored to different risk appetites.
Tip

You can only take an HDB loan once you've fully assessed eligibility (income ceiling applies), and switching from a bank loan back to an HDB loan later is generally not allowed — but switching from HDB to a bank loan is. If in doubt, HDB loan first keeps your options more open.

Run both scenarios through a calculator

Use our Loan Calculator to compare monthly instalments at different rates and tenures before committing — a 0.5 percentage point difference compounds meaningfully over 25 years.