HDB Loan vs Bank Loan: What Does S$400,000 Cost a Month?
How the HDB loan and a bank loan are priced, the rules on each, and the monthly cost of a S$400,000 loan over 25 years at several rates.
The two loans differ less in today’s rate than in what can happen to the rate later. On a S$400,000 loan over 25 years, the HDB loan at 2.60% costs S$1,815 a month. A floating bank loan priced at 3-month SORA plus 0.5 percentage point costs S$1,643 a month at today’s SORA. The HDB rate follows a fixed formula. The bank rate follows the market, and the table below shows how far it can move.
How the HDB loan is priced
HDB sets its concessionary rate at 0.1 percentage point above the CPF Ordinary Account (OA) rate. The OA rate is 2.50% and the HDB rate is 2.60% for Q4 2026, as the CPF Board announced on 22 September 2026. The rate is reviewed each quarter. The rate has been 2.60% in every quarter since Q2 2015, because the OA rate has sat at its 2.5% floor throughout.
How a bank loan is priced
A bank loan is usually a spread over a benchmark, 3-month compounded SORA. SORA was 1.24% on 14 Oct 2026. The spread differs by bank and by package, and it is the one input you must get from the banks yourself. We do not know yours.
- 3-month compounded SORA
- HDB concessionary loan rate
- CPF Ordinary Account rate
Latest: SORA 1.24% (14 Oct 2026); HDB loan 2.60% (Q4 2026); CPF OA 2.50% (Q4 2026).
The HDB rate follows the OA rate by formula and has not moved since 2015. A bank loan priced off SORA moves with the line for SORA, plus the bank's spread.
Table view
| Period | 3-month compounded SORA | HDB concessionary loan rate | CPF Ordinary Account rate |
|---|---|---|---|
| Oct 2026 | 1.24% | – | – |
| Q4 2026 | – | 2.60% | 2.50% |
| Sep 2026 | 1.23% | – | – |
| Aug 2026 | 1.19% | – | – |
| Jul 2026 | 1.14% | – | – |
| Q3 2026 | – | 2.60% | 2.50% |
| Jun 2026 | 1.08% | – | – |
| May 2026 | 1.06% | – | – |
| Apr 2026 | 1.03% | – | – |
| Q2 2026 | – | 2.60% | 2.50% |
| Mar 2026 | 1.07% | – | – |
| Feb 2026 | 1.12% | – | – |
| Jan 2026 | 1.15% | – | – |
| Q1 2026 | – | 2.60% | 2.50% |
| Dec 2025 | 1.19% | – | – |
| Nov 2025 | 1.25% | – | – |
| Oct 2025 | 1.32% | – | – |
| Q4 2025 | – | 2.60% | 2.50% |
| Sep 2025 | 1.45% | – | – |
| Aug 2025 | 1.56% | – | – |
| Jul 2025 | 1.85% | – | – |
| Q3 2025 | – | 2.60% | 2.50% |
| Jun 2025 | 2.05% | – | – |
| May 2025 | 2.27% | – | – |
| Apr 2025 | 2.36% | – | – |
| Q2 2025 | – | 2.60% | 2.50% |
| Mar 2025 | 2.55% | – | – |
| Feb 2025 | 2.73% | – | – |
| Jan 2025 | 2.90% | – | – |
| Q1 2025 | – | 2.60% | 2.50% |
| Dec 2024 | 3.03% | – | – |
| Nov 2024 | 3.21% | – | – |
| Oct 2024 | 3.38% | – | – |
| Q4 2024 | – | 2.60% | 2.50% |
| Sep 2024 | 3.49% | – | – |
| Aug 2024 | 3.57% | – | – |
| Jul 2024 | 3.64% | – | – |
| Q3 2024 | – | 2.60% | 2.50% |
| Jun 2024 | 3.63% | – | – |
| May 2024 | 3.66% | – | – |
| Apr 2024 | 3.65% | – | – |
| Q2 2024 | – | 2.60% | 2.50% |
| Mar 2024 | 3.68% | – | – |
| Feb 2024 | 3.65% | – | – |
| Jan 2024 | 3.65% | – | – |
| Q1 2024 | – | 2.60% | 2.50% |
| Dec 2023 | 3.70% | – | – |
| Nov 2023 | 3.75% | – | – |
| Oct 2023 | 3.75% | – | – |
| Q4 2023 | – | 2.60% | 2.50% |
| Sep 2023 | 3.70% | – | – |
| Aug 2023 | 3.70% | – | – |
| Jul 2023 | 3.67% | – | – |
| Q3 2023 | – | 2.60% | 2.50% |
| Jun 2023 | 3.65% | – | – |
| May 2023 | 3.62% | – | – |
| Apr 2023 | 3.61% | – | – |
| Q2 2023 | – | 2.60% | 2.50% |
| Mar 2023 | 3.58% | – | – |
| Feb 2023 | 3.22% | – | – |
| Jan 2023 | 3.14% | – | – |
| Q1 2023 | – | 2.60% | 2.50% |
| Dec 2022 | 3.03% | – | – |
| Nov 2022 | 2.92% | – | – |
| Oct 2022 | 2.46% | – | – |
| Q4 2022 | – | 2.60% | 2.50% |
| Sep 2022 | 2.07% | – | – |
| Aug 2022 | 1.60% | – | – |
| Jul 2022 | 1.27% | – | – |
| Q3 2022 | – | 2.60% | 2.50% |
| Jun 2022 | 0.77% | – | – |
| May 2022 | 0.53% | – | – |
| Apr 2022 | 0.32% | – | – |
| Q2 2022 | – | 2.60% | 2.50% |
| Mar 2022 | 0.28% | – | – |
| Feb 2022 | 0.25% | – | – |
| Jan 2022 | 0.21% | – | – |
| Q1 2022 | – | 2.60% | 2.50% |
| Dec 2021 | 0.19% | – | – |
| Nov 2021 | 0.16% | – | – |
| Oct 2021 | 0.16% | – | – |
| Q4 2021 | – | 2.60% | 2.50% |
| Sep 2021 | 0.13% | – | – |
| Aug 2021 | 0.13% | – | – |
| Jul 2021 | 0.13% | – | – |
| Q3 2021 | – | 2.60% | 2.50% |
| Jun 2021 | 0.13% | – | – |
| May 2021 | 0.17% | – | – |
| Apr 2021 | 0.19% | – | – |
| Q2 2021 | – | 2.60% | 2.50% |
| Mar 2021 | 0.22% | – | – |
| Feb 2021 | 0.20% | – | – |
| Jan 2021 | 0.17% | – | – |
| Q1 2021 | – | 2.60% | 2.50% |
| Dec 2020 | 0.17% | – | – |
| Nov 2020 | 0.12% | – | – |
| Oct 2020 | 0.12% | – | – |
| Q4 2020 | – | 2.60% | 2.50% |
| Sep 2020 | 0.10% | – | – |
| Aug 2020 | 0.10% | – | – |
| Jul 2020 | 0.08% | – | – |
| Q3 2020 | – | 2.60% | 2.50% |
| Jun 2020 | 0.14% | – | – |
| May 2020 | 0.27% | – | – |
| Apr 2020 | 0.53% | – | – |
| Q2 2020 | – | 2.60% | 2.50% |
| Mar 2020 | 0.88% | – | – |
| Feb 2020 | 1.14% | – | – |
| Jan 2020 | 1.20% | – | – |
| Q1 2020 | – | 2.60% | 2.50% |
| Dec 2019 | 1.26% | – | – |
| Nov 2019 | 1.31% | – | – |
| Oct 2019 | 1.46% | – | – |
| Q4 2019 | – | 2.60% | 2.50% |
| Sep 2019 | 1.53% | – | – |
| Aug 2019 | 1.59% | – | – |
| Jul 2019 | 1.67% | – | – |
| Q3 2019 | – | 2.60% | 2.50% |
| Jun 2019 | 1.72% | – | – |
| May 2019 | 1.68% | – | – |
| Apr 2019 | 1.62% | – | – |
| Q2 2019 | – | 2.60% | 2.50% |
| Mar 2019 | 1.54% | – | – |
| Feb 2019 | 1.59% | – | – |
| Jan 2019 | 1.55% | – | – |
| Q1 2019 | – | 2.60% | 2.50% |
Business Times, on 2 October 2026, reported these quotes. It took them from checks by The Straits Times and, for the fixed offers on a S$500,000 loan, from the Mortgage Master website:
- Most floating packages were about 1.5% to 1.8%.
- OCBC had a three-year fixed package at 2.08% and Citi a two-year fixed package at 2.2%.
- Standard Chartered raised its one-year fixed package to 2%. In the second year it floats at one-month SORA plus 0.4%, with a two-year lock-in.
Banks can change these at any time. They show what packages looked like on that day. They are not offers.
The rules side by side
| HDB loan | Bank loan (HDB flat) | |
|---|---|---|
| Loan-to-value (first loan) | Up to 75% | Up to 75%, or 55% if the tenure exceeds 25 years or the loan runs past age 65 |
| Longest tenure | 25 years, or less if age or lease limits apply | 30 years |
| Income test | Mortgage servicing ratio (MSR) of 30% | MSR of 30% and total debt servicing ratio (TDSR) of 55% |
| Rate used to size the loan | Higher of 3% or the HDB rate | Higher of 4% or the rate after any introductory period |
Sources: HDB loan limits and tenure (MyNiceHome), bank loan limits and tenure (MAS, updated 27 March 2024), MSR and TDSR (MAS) and the 4% and 3% floors (MAS, effective 30 September 2022). CPF Board’s comparison page (updated 12 June 2026) lists the TDSR for the bank loan only. The HDB limit is pro-rated when the flat’s lease does not cover the youngest applicant to age 95. See the history of each rule under loan-to-value and tenure.
S$400,000 over 25 years
The monthly instalment equals the loan times the monthly rate, divided by one minus the monthly rate plus one, raised to the power of minus 300 (the number of months). The monthly rate is the annual rate divided by 12. Propwise ran this in a short script.
The bank rows use the 3-month SORA reading of 1 October 2026, 1.23%. The latest reading is 1.24% (14 Oct 2026). These are illustrations, not offers.
Source: Propwise calculation (standard monthly-instalment formula). HDB rate per CPF Board, 22 Sep 2026; 4.00% is the MAS test rate. Illustrations, not offers.
| Scenario | Annual rate | Monthly instalment | Interest if the rate never changes |
|---|---|---|---|
| HDB loan | 2.60% | S$1,815 | S$144,403 |
| Bank: SORA plus 0.5 pp | 1.73% | S$1,643 | S$93,000 |
| Bank: SORA plus 1.0 pp | 2.23% | S$1,741 | S$122,169 |
| Bank at the 4.00% MAS test rate | 4.00% | S$2,111 | S$233,404 |
A floating rate does not stay put for 25 years. Each extra percentage point on the bank rate adds about S$198 a month to this loan. The 4% row is not a forecast. It is the rate banks use to test whether you can afford the loan.
The same test shows what income you need. This is a rough check, not an HDB or bank assessment, and it counts only this mortgage. At 3%, the HDB sizing rate, the instalment is S$1,897. At 4%, the bank test rate, it is S$2,111. Divided by the 30% MSR, these need gross monthly income of at least S$6,323 and S$7,038. The 55% TDSR limit would need S$3,839, so with no other debts the MSR is the tighter test.
The trade-offs
- Rate stability. The HDB rate has stayed at 2.60% since Q2 2015, but it follows the OA rate, which is reviewed each quarter. A bank rate that tracks SORA moves with the market. A fixed package holds for a set period, then floats.
- Early repayment. CPF Board says the HDB loan has no lock-in and no penalty for early repayment. It says most bank loans have a lock-in, typically around one to three years, and that paying off or refinancing within it can cost a penalty “around 1.5% of the outstanding loan amount, although terms vary based on the bank and loan package” (CPF page last updated 12 Jun 2026, read in full on 6 Oct 2026). Refinancing can add legal and valuation fees and clawbacks of subsidies or rebates from the first bank. Check the letter of offer.
- Switching. CPF Board says you can refinance an HDB loan to a bank at any time, but you cannot switch back. MyNiceHome says a bank loan cannot move to HDB. Our refinancing guide covers the steps.
- CPF. With the HDB loan you must use your OA savings first, and you may keep up to S$20,000. A bank loan sets no such rule.
- Limits. The HDB loan has a shorter tenure cap. The bank loan has a second income test, and MAS sets a minimum cash payment of 5% at the 75% limit (10% at 55%).
Our HDB loan guide covers eligibility, and the mortgage calculator lets you test your own numbers.
Source: CPF Board, HDB, MAS, MyNiceHome and Business Times, linked above. SORA from MAS. Instalments are Propwise calculations. This article does not tell you which loan to take.
