Choosing Between HDB and Bank Loans
HDB loans suit buyers who want certainty — the rate is fixed at 2.6% p.a. and eligibility is more forgiving. You also get a higher LTV of 80%, meaning a smaller cash or CPF down payment. The trade-off is a higher interest rate compared to most bank packages.
Bank loans suit buyers comfortable with rate movements who want a lower starting rate. Most fixed packages start at 2.5–3.5% for the first 2–3 years, while floating rates track SORA. Bank loans are available for both HDB and private property, but have stricter credit requirements and a lower 75% LTV cap.
The right choice depends on your risk tolerance, financial stability, and how long you plan to hold the property. Not sure which suits you? Chat with an advisor and they’ll walk you through it.
Refinancing — When It Makes Sense
Refinancing means switching your existing home loan to a new lender offering better terms. It’s worth considering when:
- Your lock-in period has ended
- Market rates have dropped significantly since you took the loan
- You want to switch between fixed and floating rate structures
Before deciding, factor in legal fees (typically $2,000–$3,000), valuation costs, and any clawback penalties your current lender may impose.
When Banks Say No
Common reasons for mortgage rejection include:
- TDSR above 55% — your total monthly debts are too high relative to income
- Irregular income — common for self-employed borrowers or commission-based earners
- Multiple existing properties — lower LTV limits make financing harder
- Credit history issues — late payments or defaults on record
If you’ve been declined, our advisors can help you understand your options — which may include restructuring existing debts, increasing your down payment, or timing your application differently.
Things to Watch
Lock-in penalties — Breaking your lock-in early typically costs 1.5% of the outstanding loan. On a $500K loan, that’s $7,500.
Clawback clauses — Some banks claw back legal fee subsidies if you refinance within 2–3 years of origination, even after the lock-in ends.
Progressive payments — For BTO or new-build purchases, your loan draws down in stages. You only pay interest on the amount drawn, not the full loan, during construction.