More Information on Your HDB Housing Loan

You may find the additional information on the HDB housing loan useful when planning your finances. 

 

Details on your HDB housing loan

We will assess your income, age, and financial situation to determine the eligible loan amount. The HDB concessionary housing loan interest rate is pegged at 0.1% above the CPF Ordinary Account interest rate. HDB will not provide housing loan for a flat with a remaining lease of 20 years or less at the time of the flat application. There is also no mortgage financing for the purchase of a short-lease 2-room Flexi flat.

Credit assessment

The housing loan amount that can be offered will depend on the buyers’ age, monthly income^, and financial situation.

If you are buying an uncompleted flat from HDB, we will review your financial position nearer the completion of the flat before we disburse the housing loan. This is to confirm that there is no change in your ability to service the housing loan. 

You can check the income guidelines to find out more about the types of income we assess, and the documents to provide for credit assessment.

^The applicant must be employed in the month of application and remain gainfully employed when HDB disburses the housing loan.

Housing loan amount

The housing loan amount you can take will depend on the following:

  • Repayment period

This is capped at 25 years, or up till the buyer is 65 years old, or the remaining lease of the flat at the point of the flat application+ minus 20 years, whichever is shorter. 

+For flat applications received before 10 May 2019, HDB housing loan may be reduced or disallowed if you are buying or taking over the ownership of a flat with a remaining lease of less than 60 years.

  • Applicable interest rate

The HDB loan amount is worked out using the prevailing interest rate, which may be revised from time to time. The interest payable on the HDB housing loan is computed on a monthly-rest basis or such other basis as HDB may decide.  

The HDB housing loan interest rate is pegged at 0.1% above the CPF Ordinary Account interest rate. It will be reviewed in the months of January, April, July and October, in line with the reviews of CPF interest rates.

  • Monthly instalments

This is capped at 30% of the buyers' monthly income.

  • Loan-to-Value limit (LTV)

For new flats, the LTV limit* is up to 90% of the purchase price. For resale flats, it is up to 90% of the lower of the resale price or value of the flat.

The HDB housing loan amount will be pro-rated from the 90% LTV, if the remaining lease does not cover the youngest buyer/ owner till the age of 95 at the point of the flat application+.

Use the payment plan calculator to find out the payments required at various milestones for the purchase of a new or resale flat, and check that you have sufficient budget before committing to buy a flat.

Notes:
*The LTV limit refers to the maximum loan amount a flat buyer may get, expressed as a percentage of the flat purchase price or assessed market value.

+For flat applications received before 10 May 2019, HDB housing loan may be reduced or disallowed if you are buying or taking over the ownership of a flat with a remaining lease of less than 60 years.

Using your CPF savings

If you are taking an HDB housing loan to buy or take over the ownership of a flat, you may use the savings (up to the applicable CPF usage limits) in your CPF Ordinary Account to pay the stamp, registration, and conveyancing fees, and the premium for the CPF Home Protection Insurance (if applicable). You also have the option of retaining up to $20,000 in your CPF Ordinary Account. The rest of the available CPF Ordinary Account balance must be used for buying or taking over the flat, before an HDB housing loan is granted.

Use of CPF savings

Buyers will have the option of retaining up to $20,000 of the available savings in each of their CPF Ordinary Accounts (OA). The rest of the available CPF OA balance must be used to pay for the flat purchase, before taking up an HDB housing loan. Buyers may also use the savings in their CPF OA to pay the stamp fee, registration fee, and conveyancing fees, and premium for the CPF Home Protection Insurance (if applicable).

The total amount of CPF money that can be used for buying a flat or taking over ownership of an existing flat will depend on the extent the remaining lease of the flat can cover the youngest buyer or transferee up to the age of 95. Please see details on the use of CPF money and the applicable limits for the purchase of a new flat or resale flat.

For more information on the use of CPF money, you may use the CPF Board's online calculator.

When taking a second HDB housing loan

For those applying for a second HDB housing loan, the loan amount will be reduced using the CPF refund and part of the cash proceeds from the disposal of the last-owned HDB flat. If you have not disposed of the existing flat before buying the next flat with a second HDB housing loan, you will first be granted a housing loan at commercial interest rate. The interest rate will be converted to concessionary rate when you dispose of the existing flat, and use the CPF refund and part of the cash proceeds to reduce the housing loan for the next flat purchase.

Reducing the loan amount for a second HDB housing loan

The loan amount for the second HDB housing loan will be reduced using the CPF refund and up to 50% of the cash proceeds from the disposal of the existing or last-owned HDB flat. This facilitates financial prudence and prevents over-borrowing.  

The manner of disposal of a flat includes the sale, transfer or surrender of a flat, or by any other method under the Housing and Development Act or any other written law.

HDB reserves the right to determine the amount of proceeds to be used, either by taking into account the manner of holding of the existing/ last-owned HDB flat, or according to any court order that provides for the disposal/ division of the flat. 

Generally, flat buyers can keep the greater of $25,000 or 50% of the cash proceeds (including the cash deposit received), and HDB will take into account the remaining part of the cash proceeds when determining the quantum of the second HDB housing loan.

If you buy an HDB flat after disposing of the existing one

You and the essential occupier will have to use up to 50% of the cash proceeds from the disposal of the existing HDB flat.  You may retain up to $20,000 in your CPF Ordinary Account and use the rest of the available CPF Ordinary Account balance to buy the next flat.

If you buy an HDB flat before disposing of the existing one

You will be charged commercial interest rate (pegged to the average non-promotional interest rate for HDB flats offered by the 3 local banks) for the housing loan to buy the next flat.

The interest rate will be converted to concessionary rate when you have disposed of the existing flat, and have used the CPF refund and up to 50% of the cash proceeds from the disposal to repay the housing loan for the next flat purchase. From the CPF monies refunded, you may retain up to $20,000 in your CPF Ordinary Account.

Servicing your HDB housing loan

The monthly instalment payments are due on the first day of the month and can be paid using cash and/ or CPF savings. For partial capital repayment or redemption of the HDB housing loan, you will need to give HDB a written notice of at least one month in advance.

Repayment

Payment of the first monthly instalment will start on the first day of the second month, following the month in which the housing loan is disbursed. Thereafter, it will be due and payable on the first day of every month, until the loan is fully redeemed. You can use your cash and/ or CPF savings to pay the monthly instalments, subject to the prevailing rules of the CPF Board. 
 
A late payment charge will be imposed on any outstanding instalment at the end of the month. Any payment received subsequently will first be used to settle any outstanding late payment charges, followed by other outstanding charges and interests.
 
The balance will then be applied towards the payment of the loan instalment. Payments made using CPF savings will be deducted automatically. You can use set up a GIRO arrangement to deduct the instalments from your bank account.

Partial capital repayment and redemption of loan

During the loan tenure, you can make partial or full capital repayment of the loan by using your CPF and/ or cash savings.

You can submit an application to your HDB branch to make a partial capital repayment of the housing loan. The proposed date for partial or full capital repayment of the loan will be scheduled one month from the date your HDB branch has received your application. Full payment must be received by the date.

 To fully redeem the housing loan, you have to pay the whole of the principal sum and all other monies due to HDB, including interest up to the date of HDB's receipt of the payment. HDB reserves the right not to accept any such payment, or to accept such payments only if it meets the minimum sum that is determined by HDB.

You can refer to Servicing Your HDB Loan for more details.

 

Insurance for HDB housing loans

You will have to buy these insurance policies when you take an HDB housing loan. These will help to protect you and your loved ones in the case of any unforeseen circumstances.

If you take an HDB housing loan to buy or take over ownership of a flat, you will have to buy these insurance policies:

The Home Protection Scheme is a mortgage-reducing insurance scheme administered by the CPF Board. It insures CPF members and their families against losing their home, should the policy holder become permanently incapacitated or pass away before the housing loan is paid up.