What is the HDB loan interest rate in 2026?

The HDB concessionary loan rate in 2026 is 2.6% p.a., pegged at the CPF OA interest rate of 2.5% plus 0.1%. This rate has not changed since 1999.

Can I switch from an HDB loan to a bank loan?

Yes. You can refinance from an HDB loan to a bank loan at any time with no penalty from HDB. However, once you switch to a bank loan, you cannot switch back to an HDB loan -- this is a one-way decision.

Last reviewed: 19 May 2026

HDB Loan vs Bank Loan 2026: The 8 Scenarios Where Each Is the Right Choice

By Winfred Quek · CEA R073319H · Crestbrick

Quick answer: HDB concessionary loan at 2.6% p.a. offers higher LTV (80% for resale, 90% for BTO) and rate stability; bank loans start around 1.45–1.7% fixed in 2026, saving $250–$450/month on a $400K loan during the fixed period. The critical catch: switching from HDB to bank is possible anytime but switching from bank back to HDB is permanently blocked.

Facts verified: May 2026 · Sources linked below

The Structural Differences First

Most buyers frame this as a rate comparison. That is accurate but incomplete. HDB loan and bank loan differ across six structural dimensions, and the "right" answer depends on which constraint matters most to your household.

Feature	HDB Concessionary Loan	Bank Loan (2026)
Interest rate	2.6% p.a. (fixed formula)	1.45–1.7% fixed (2yr); 1.7–1.9% (3yr)
LTV BTO	90% (5% cash + 5% cash/CPF)	75% (5% cash + 20% cash/CPF)
LTV Resale HDB	80% (20% cash/CPF)	75% (5% cash + 20% cash/CPF)
Rate stability	Pegged to CPF OA + 0.1%; stable since 1999	Fixed for 2–3 years, then floating
Switching out	Can switch to bank loan anytime, no penalty	Lock-in penalty (1.5%) during fixed period
Switching back	N/A (you start here)	Cannot return to HDB loan once you leave
CPF OA minimum	No minimum OA balance required	Must maintain $20,000 OA (for HDB properties)
Eligibility gate	Income ceiling $14K (family), $7K (single), SC ownership required	No income ceiling

Real Example: Woodlands BTO Couple HDB vs Bank Loan on a $480,000 Loan

Detail	HDB Concessionary Loan	Bank Fixed 2Y at 1.6%
Profile	SC couple, household income $9,500/month. Buying Woodlands BTO at $520,000. CPF OA (combined): $60,000.
BTO purchase price	$520,000	$520,000
LTV	90% → borrow $468,000	75% → borrow $390,000
Minimum cash downpayment	5% = $26,000 (cash)	5% = $26,000 (cash)
Balance downpayment (CPF/cash)	5% = $26,000 (CPF OA)	20% = $104,000 (CPF OA or cash)
CPF OA available	$60,000 covers 5% easily	$60,000 covers only $60K of $104K needed; $44K shortfall
Monthly instalment (25yr)	$468K @ 2.6% = $2,121/month	$390K @ 1.6% = $1,669/month during fixed period
Monthly saving during fixed period	Baseline	$452/month saving × 24 months = $10,848 saved
After 2-year fixed period (SORA ~1.5%)	2.6% unchanged	~3.1% all-in floating = $1,873/month (still saves $248/month)
10-year total interest cost	~$95,400	~$73,200 (at avg 2.0% for 10yr)
10-year net saving	Baseline	~$22,200 saving but only achievable if $44K CPF shortfall is bridged with extra cash savings
Verdict	Right choice for this couple CPF OA is insufficient for bank loan's 20% down at BTO	Would be optimal but CPF balance creates a cash crunch at collection

This couple should take the HDB loan. At $9,500/month income with only $60K CPF OA, they cannot comfortably meet the bank loan's 20% downpayment without depleting emergency cash. The HDB loan's 90% LTV removes this barrier. They can always switch to a bank loan after MOP once CPF OA has rebuilt.

Monthly Payment Comparison on a $400,000 Loan

The table below compares actual monthly payments at 25-year tenure across the HDB rate and two bank fixed rate scenarios.

Loan Amount	HDB 2.6% (25yr)	Bank Fixed 1.55% (25yr)	Bank Fixed 1.75% (25yr)	Monthly Saving (Bank vs HDB)
$300,000	$1,359	$1,199	$1,240	$119–$160
$400,000	$1,812	$1,599	$1,653	$159–$213
$500,000	$2,265	$1,999	$2,066	$199–$266
$600,000	$2,718	$2,398	$2,479	$239–$320

Bank savings apply only during the 2–3 year fixed period. After that, SORA-pegged rates apply currently around 1.5–2.0% in 2026, below HDB's 2.6%, but subject to change with interest rate cycles.

HDB Loan Eligibility in 2026

To qualify for an HDB concessionary loan, all criteria must be met:

At least one buyer must be a Singapore Citizen
Monthly household income: ≤$14,000 (family), ≤$7,000 (single under 35), ≤$14,000 (joint singles)
No private property owned in the last 30 months
Buying an HDB flat (BTO or resale)
No outstanding HDB loan on another flat
Property value ≤$800,000 for resale (no cap for BTO)

One-way door: If you take a bank loan for your HDB flat (or refinance your HDB loan to a bank), you permanently lose access to HDB concessionary loan for that flat. This matters most if you face job loss or rate rises the HDB loan safety net disappears. This is the single biggest risk in choosing bank over HDB for your primary home.

8 Scenarios and the Right Call for Each

Scenario 1 Income near the ceiling ($12K–$14K)

Bank loan. You qualify for HDB loan but your income is high enough that the rate savings are meaningful and you can absorb rate resets. Save the $150–$250/month difference and refinance strategically at every fixed-period end.

Scenario 2 Income below $6K, limited savings

HDB loan. The 80–90% LTV means lower cash required upfront, and the rate stability protects against payment shock if rates rise. The HDB loan's rate has been 2.6% since 1999 that is a form of insurance.

Scenario 3 Plan to sell within 5 years (after MOP)

Bank loan, but only if you lock the sale before the fixed period ends. If you can sell within your 2-year fixed period, you save on interest and exit before the floating rate kicks in. Coordinate sale timing with lock-in expiry.

Scenario 4 Single buyer, income borderline for TDSR

HDB loan. The higher LTV (80% for resale) reduces the loan amount needed, making TDSR easier to pass. Bank loan requires 25% down payment that extra 5% cash or CPF could be decisive for a cash-light buyer.

Scenario 5 Both spouses have strong stable incomes

Bank loan. Refinance risk is low because dual income provides buffer. Take the rate savings, build CPF, and refinance every 2–3 years at prevailing best rates. This is the financially optimal path for dual-income professional households.

Scenario 6 Near retirement, one income dropping soon

HDB loan. Rate stability matters more than savings when future income is uncertain. Locking in 2.6% for life (with no reset risk) beats a 1.6% fixed rate that floats to 3.5% when the earning spouse retires.

Scenario 7 High CPF OA balance

Bank loan worth considering. With strong CPF, you can handle the higher down payment (bank loan requires 25% vs HDB's 80% coverage), and the lower rate means more CPF savings accumulate at 2.5% OA interest rather than being consumed by higher mortgage payments.

Scenario 8 Buying a resale flat above $600K

Model both. The HDB loan caps LTV at 80% (so you borrow $480K on a $600K flat), while a bank loan at 75% means borrowing $450K. The $30K less borrowed via bank partially offsets the higher down payment requirement. Run the total cost with the expected holding period.

The Step-by-Step Decision Process

Check HDB loan eligibility first if income exceeds $14K or you recently owned private property, bank loan is your only option. Skip to step 4.

Calculate the monthly savings use the table above or the TDSR calculator to model bank loan vs HDB loan at the actual loan amount you need.

Stress test the bank rate reset assume the bank rate rises to 3.5% after the fixed period. Can your household absorb the higher monthly payment? If not, HDB loan.

Factor in your holding horizon if holding past 10 years, the bank savings in years 1–3 may be dwarfed by 7 years of floating rates above HDB's 2.6%. Model the full tenure.

Decide and commit for BTO buyers, you declare your preference at key collection. For resale buyers, confirm loan choice with your bank or HDB before issuing OTP.

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