Value Add Singapore

Bank Loan vs. HDB Loan

We dream of having our own house. When the time has come to fulfil our dreams, we encounter different concerns that can affect our decision. In this case, should we consider bank loan or HDB (Housing Development Board) loan when talking about mortgage? Purchasing a home here in Singapore needs a thorough understanding.


A home mortgage will probably be our biggest loan. It is therefore important that we conduct proper research so we won’t end up spending everything we have for mortgage payments. Mortgage rates here in Singapore depend on the size and cost of the properly, employment and age.

After understanding the stakes, we have to pursue it by determining whether it will be HDB or bank loan. Here are the pros and cons of bank loan and HDB loan:

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  • HDB loan: About 80% of Singaporeans live in estates developed by HDB. The goal of HDB is to give citizens a place to thrive by creating high-quality homes and vibrant communities. HDB loans are not for all buyers since there are many criteria. Once we are given a HDB Home Loan Eligibility letter, we have to make the purchase within 6 months. The interest rate is 2.6% per annum. HDB is also a good choice since they give more consideration when it comes to missing payments.
  • Bank loan: For those who are not qualified for a HDB loan, bank loan may be considered. Bank loans offer different repayment options. As of this time, bank loan has cheaper mortgage rate. Bank loan is best for people who want to secure mortgage here with good rates.


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