HDB housing loan vs bank loan: the key differences in plain terms
HDB offers a concessionary loan with a pegged rate and its own LTV limit. A bank loan follows MAS rules on tenure and LTV. Two different frameworks.
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- HDB concessionary rate
- CPF OA rate plus 0.1 percentage points, reviewed quarterly; 3.0% per annum floor used to assess eligible loan amountHDB: HDB housing loan interest rate
- HDB LTV limit
- Up to 75% of the purchase price for new flats; up to 75% of the lower of the resale price or value for resale flatsHDB: HDB housing loan LTV
- HDB maximum loan tenure
- Shortest of: 25 years; 65 years minus average age of applicants; remaining lease at application minus 20 years. LTV is pro-rated if remaining lease does not cover youngest applicant to age 95HDB: HDB housing loan tenure
- Bank loan maximum tenure
- 30 years for HDB flats; 35 years for non-HDB propertiesMAS: loan tenure
- Bank loan LTV (first property, no existing loans)
- 75% if the loan tenure is up to 30 years (up to 25 years for HDB flats) and the loan ends by age 65; 55% otherwise. Minimum cash downpayment: 5% at 75% LTV or 10% at 55% LTV, with no outstanding housing loan.MAS: LTV limits
Two frameworks, not one product
HDB publishes the terms for its concessionary housing loan at HDB, Housing Loan from HDB (opens in a new tab), including the interest rate, LTV limit and loan tenure. MAS, Loan Tenure and Loan-to-Value Limits sets out the maximum loan tenure and LTV limits for housing loans from financial institutions. These are separate frameworks with different rules and different rate-setting approaches. HDB, Housing Loan from HDB. MAS, Loan Tenure and Loan-to-Value Limits (opens in a new tab).
HDB concessionary loan interest rate
The HDB housing loan interest rate is concessionary: it is set at 0.1 percentage points above the prevailing CPF Ordinary Account interest rate and reviewed quarterly. There is also an interest rate floor of 3.0% per annum, used to determine the maximum eligible loan amount rather than a minimum rate charged. The rate is computed on a monthly-rest basis. HDB, Housing Loan from HDB (opens in a new tab).
The rate is not the same as the CPF OA rate itself: it is CPF OA plus 0.1 points. When the CPF OA rate changes, the HDB loan rate changes at the next quarterly review. The current HDB concessionary rate is published on the HDB website. HDB, Housing Loan from HDB (opens in a new tab).
HDB LTV limit and loan tenure
The HDB LTV limit is up to 75% of the purchase price for new flats, and up to 75% of the lower of the resale price or value for resale flats. This LTV limit applies when the remaining lease of the flat covers the youngest applicant to age 95. If the remaining lease falls short of covering the applicant to age 95, the LTV limit is pro-rated from 75%. HDB, Housing Loan from HDB (opens in a new tab).
The maximum loan period is the shortest of: 25 years; 65 years minus the average age of the applicants; and the remaining lease at the point of flat application minus 20 years. The monthly instalment must not exceed 30% of the applicants' combined monthly income. HDB, Housing Loan from HDB (opens in a new tab).
Bank loan LTV limit and loan tenure under MAS rules
MAS sets the maximum loan tenure for housing loans from financial institutions: 30 years for HDB flats and 35 years for non-HDB properties. The LTV limit for a borrower with no existing housing loans is 75% if the loan tenure is 25 years or less for HDB flats (30 years or less for non-HDB) and the repayment period ends before the borrower's 65th birthday. If the tenure exceeds 25 years for an HDB flat, or extends past age 65, the lower LTV limit of 55% applies, with a 10% cash downpayment required. MAS, Loan Tenure and Loan-to-Value Limits (opens in a new tab).
With one outstanding housing loan, the LTV limit is 45% (or 25% with the lower limit). With two or more outstanding housing loans, the LTV limit is 35% (or 15% with the lower limit). With no outstanding housing loans, the minimum cash downpayment is 5% (LTV 75%) or 10% (LTV 55%); 25% cash downpayment applies only with existing loans. MAS, Loan Tenure and Loan-to-Value Limits (opens in a new tab).
Keep the two rate-setting systems separate
The HDB concessionary rate is tied to the CPF OA rate; the bank loan rate is set by the bank. These are different rate-setting mechanisms. A bank loan rate may be higher or lower than the HDB concessionary rate depending on market conditions and the borrower's profile. HDB, Housing Loan from HDB (opens in a new tab).
This guide explains the published frameworks; it does not recommend one loan type over another. Eligibility for an HDB loan depends on citizenship, property ownership, income ceiling and credit assessment. HDB, Housing Loan from HDB (opens in a new tab).