HDB loan or bank loan in 2026? What the difference costs you

For an HDB flat you can borrow from HDB at a fixed 2.6%, or from a bank at a floating rate. In 2026, bank rates are lower, so the question is whether the saving is worth the risk.

The monthly difference

Example: $550,000 flat, 75% loan ($412,500), 25 years.

	HDB loan (2.6%)	Bank loan (1.8%)
Monthly instalment	$1,871	$1,709
Total interest	$148,916	$100,054
Cash needed upfront	$0	at least $27,500 (5%)

The bank loan saves about $160 a month, if rates stay where they are.

Try your own numbers →

Why people still pick the HDB loan

• Stable: 2.6% is pegged to the CPF Ordinary Account rate and has not changed for decades.
• No cash downpayment: the 25% downpayment can come entirely from CPF.
• Lower income bar: HDB tests affordability at 3%, banks at 4%.
• No way back: once you refinance to a bank, you can’t return to an HDB loan.

When a bank loan makes sense

• You have the cash for the 5% minimum.
• You can absorb higher payments if rates rise. At 4%, the same loan costs $2,177 a month.
• You plan to watch rates and refinance when your lock-in ends.

Either way

Both loans cap at 75% of the price, and the instalment must stay within 30% of your household income for HDB flats (MSR).