If you've been Googling "HDB loan vs bank loan," you've probably found plenty of comparison tables. What you haven't found is a clear answer for your specific situation — because the sites ranking on those searches either earn referral fees from banks, or give advice so hedged it's useless.
The core trade-off
The rate comparison is only half the story.
The HDB concessionary loan rate is pegged at 0.1% above the CPF OA rate, currently 2.6% per annum. It's fixed and predictable. Bank loans start lower — sometimes 1.5–2% in the first few years — but are pegged to SORA, which moves with market rates.
HDB Loan 2.6% p.a.
- ✓Predictable — rate won't spike if SORA rises
- ✓10% downpayment, all from CPF OA
- ✓Can switch to bank loan later — once only
- ✓More flexibility if you miss a payment
- ✗Rate higher than bank loans in good times
- ✗Only for HDB flats — not EC or private
- ✗Cannot switch back once you leave HDB
Bank Loan SORA-linked
- ✓Potentially lower rate in early years
- ✓Fixed-rate packages available (2–3 yr lock-in)
- ✓Required for EC and private property
- ✗5% cash downpayment — CPF can't cover this
- ✗Rate can rise significantly after fixed period
- ✗Refinancing needed every 2–3 years
- ~More admin — need to actively manage
Who it actually suits
Your situation determines the answer more than the rate does.
Young couple, first BTO, stable employment, limited cash savings
No 5% cash buffer for bank loan downpayment. Dual income but early career. Don't want to refinance every 2 years.
HDB Loan — cleaner, less cash required upfrontBoth working professionals, good savings, plan to upgrade in 5–7 years
Can handle 5% cash downpayment. Comfortable managing refinancing. Likely to sell before SORA variability bites hard.
Bank Loan — lower early cost makes sense for short holdOne variable income (commission, freelance), want stability
Income fluctuates. The 2.6% certainty is worth more than potential rate savings.
HDB Loan — certainty has real value when income variesBuying EC or private condo
HDB loan isn't available. Decision becomes which bank and which package — fixed vs floating, lock-in period.
Bank Loan — no choice, but choose the package carefullyBank loan fixed periods typically last 2–3 years. After that, your rate reverts to a floating SORA-linked rate which can be significantly higher. Most buyers need to refinance at the end of each fixed period — that takes time, admin, and sometimes legal fees. If you don't manage this actively, you can end up paying more than you would have on an HDB loan.
Your situation is specific. The answer should be too.
Franky asks about your income, savings, downpayment capacity, and plans — then gives you a clear, honest take on which route suits you.
Talk to Franky →