• Should I apply for a housing loan from HDB or from a financial institution? 

    If you need a housing loan, you can obtain one from HDB if you meet the eligibility conditions, or from a financial institution that is regulated by the Monetary Authority of Singapore.

    Difference in loan interest rates

    The HDB concessionary interest rate is pegged at 0.1% above the prevailing CPF Ordinary Account interest rate. It is reviewed quarterly, in line with the CPF interest rate revisions.

    On the other hand, the interest rates and accompanying terms offered by financial institutions are more susceptible to fluctuations. For instance, some financial institutions may offer loan packages with low promotional interest rates for the first few years with a lock-in period, after which the interest rate could be revised in line with the prevailing market conditions.

    Choose a financially sustainable option

    If you are deciding whether to finance your home with a loan from HDB or a financial institution, you should study your options carefully and decide on a loan package that best suits your needs over the long term. You can also tap on the calculators on the HDB Flat Portal to get an estimate of housing loans from HDB and participating financial institutions.

    Just bear in mind that if you have taken up an HDB loan, you can later refinance the loan with a financial institution without any penalty. However, you cannot refinance the loan with HDB subsequently.