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Knowing your repayments is just the first step toward home ownership. Our mortgage experts help you compare the latest HDB and bank loan packages across all major lenders in Singapore to ensure you never overpay on interest. Let us do the heavy lifting to find the best financing deal for your budget.

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How to choose a mortgage that fits Your financial situation

For Singaporeans, the typical choice is between a bank loan and HDB loan. Here are some things you should consider before making this huge decision.

HDB Loans vs Bank Loans: Generally, the HDB Loan is a more popular financing option, especially for young couples and working adults. These are some of the reasons why some may choose a HDB Loan over a Bank Loan.

1. No early repayment penalty for HDB loan 

One of the key attractiveness of getting a HDB Loan is in its flexible repayment period. If you take on a HDB loan, you will not be penalised if you choose to repay your loan early.

In retrospect, a bank loan does not allow you to pay off your loan early, and you may even incur an early repayment penalty by doing so.

2. Those taking an HDB loan can choose to switch to a bank loan but not vice versa

For those who choose to take up a HDB Loan, you can choose to refinance and take up a bank loan instead. Since there is no lock-in period for HDB Loans, HDB Loan borrowers can freely choose to switch to a bank loan at any time, without incurring a penalty.

However, if you opt for a bank loan, you will not be able to change to a HDB Loan during the mortgage period. This means that taking a HDB Loan will give you more flexibility when it comes to early repayments, and the option to switch to a bank loan.

3. HDB loan has a lower initial downpayment 

The HDB loan has a lower initial downpayment. With a downpayment of 10% of the flat’s value, this is much lower than the 25% downpayment required by banks. This means that for a $400,000 flat, you will need to pay $40,000 in downpayment via your CPF, via the HDB loan.

If you’re taking a bank loan instead, you may have to fork up $100,000 in downpayment, of which $20,000 has to be paid in cash. Especially for couples who’ve just started out in their careers, the latter may seem relatively unaffordable.

Frequently asked questions (FAQ)

1. Is it better to choose an HDB loan or a bank loan?

The choice depends on your financial priorities. An HDB loan offers a higher loan-to-value limit of 75% and a stable interest rate but is often more expensive than bank rates during low-interest periods.

Bank loans usually offer more competitive rates but require a higher cash downpayment and come with penalties for early repayment during the lock-in period.

2. How does the total debt servicing ratio affect my loan amount?

The total debt servicing ratio or TDSR is a cooling measure that limits your total monthly debt obligations to a fixed percentage of your gross monthly income. This includes not just your mortgage but also car loans, credit card balances, and personal loans.

Our calculator helps you estimate repayments, but your final loan approval will depend on meeting these regulatory limits.

3. What is the difference between fixed and floating interest rates?

A fixed rate mortgage locks in your interest rate for a set period, providing protection against rising rates and certainty in your monthly budgeting. A floating rate is usually pegged to a market benchmark like SORA and fluctuates based on market conditions.

In 2026, many homeowners choose fixed rates for stability or floating rates if they anticipate a downward trend in interest costs.

4. Can I use my CPF Ordinary Account to pay for my mortgage?

Yes, you can use your CPF Ordinary Account savings for the downpayment and monthly instalments of your property loan.

However, you should be aware of the CPF withdrawal limits and the accrued interest that must be refunded to your account when you sell the property in the future.

5. When should I consider refinancing my home loan?

Refinancing involves moving your current mortgage to a different bank to secure a lower interest rate. You should typically consider this when your current lock-in period is ending or when market interest rates have dropped significantly.

Refinancing can save you thousands of dollars in total interest over the remaining life of your loan.

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