📌 Quick Answer
An HDB housing loan and a bank loan may both cover up to 75% of an HDB flat’s purchase price or applicable valuation. However, 75% is a maximum, not a guaranteed loan amount. With an HDB loan, there is no compulsory cash component within the standard 25% downpayment if you have enough usable CPF Ordinary Account savings. With a bank loan at 75% LTV, at least 5% must generally be paid in cash. You may refinance an HDB loan with a bank later, but you cannot switch from bank financing to an HDB loan for the same flat.
It used to be easy to explain the difference between an HDB loan and a bank loan: the HDB option let you borrow a larger proportion of the flat’s price. That changed on 20 August 2024, when the maximum HDB loan-to-value limit was reduced from 80% to 75%, bringing HDB loans in line with the usual maximum for bank loans.
But the same LTV does not make the two loans interchangeable. Your compulsory cash contribution, use of CPF savings, interest-rate risk, and refinancing options can still look very different. The MyNiceHome housing loan guide compares the main features of both options. Here is how those differences affect an actual flat purchase.
What does a 75% LTV actually mean?
The loan-to-value ratio, or LTV, is the maximum percentage of the property’s price or value that may be financed by a housing loan.
For an HDB loan, the maximum is generally:
• Up to 75% of the purchase price for a new flat
• Up to 75% of the resale price or HDB’s value of the flat, whichever is lower, for a resale flat
For a bank loan, the usual maximum is up to 75% of the purchase price or the bank’s valuation, whichever is lower.
Suppose you are buying a resale flat for $500,000 and it is also valued at $500,000. If you receive the full 75% loan:
• Maximum loan: $375,000
• Total downpayment: $125,000
With an HDB loan, the $125,000 downpayment may be paid using CPF OA savings, cash, or a combination of both, subject to CPF housing-use rules.
If you are granted a bank loan at 75% LTV, you must pay a 25% downpayment, including at least 5% of the purchase price in cash. The remaining 20% may be paid with CPF OA savings, cash, or both.
This example assumes the purchase price and valuation are the same. If a resale flat is bought above its valuation, the difference is cash-over-valuation and must be paid entirely in cash, regardless of which loan you choose.
Who qualifies for an HDB loan?
An HDB loan is not available to every HDB flat buyer. You must apply for an HFE letter, which will state whether you qualify and the estimated loan amount available to you. The current average gross monthly household income ceilings are:
• $14,000 for families
• $21,000 for eligible extended families
• $7,000 for singles buying under the Single Singapore Citizen Scheme
These are not the only conditions. HDB also considers citizenship, property ownership, employment, previous HDB loans, and its credit-assessment criteria. For example, at least one applicant must be a Singapore Citizen, and the household must not have taken two or more HDB housing loans.
A bank loan does not carry the same HDB income ceilings, but the bank will conduct its own assessment of your income, debts, and creditworthiness. If you need financing but do not qualify for an HDB loan, bank financing may be your remaining loan option. That makes it important to account for the compulsory cash contribution before committing to a flat.
Can you switch loans later?
You may refinance an HDB loan with a bank later, subject to the bank’s approval. HDB loans do not have a lock-in period or an early-repayment penalty. Once you refinance with a bank, however, you cannot switch back to an HDB loan for that flat. If you begin with bank financing, your later options are generally to reprice the loan with the same bank or refinance it with another bank.
These options remain subject to the bank’s terms, assessment, and any lock-in period. This one-way rule does not automatically make the HDB loan the better choice. But if you qualify for both today, starting with an HDB loan preserves the possibility of moving to a bank later. Starting with a bank means giving up the HDB-loan option for that flat.
How should I decide between an HDB loan or bank loan?
Start with assessing your needs. If the 5% compulsory cash contribution would leave you without a comfortable emergency fund, an HDB loan may be the more manageable option, provided you qualify and have enough usable CPF savings. Then look beyond the downpayment. A buyer with limited cash who prefers predictable repayments may lean towards an HDB loan. A buyer with sufficient cash who is comfortable comparing and managing changing bank packages may prefer bank financing.
The figure that matters is not simply the maximum 75%. It is how much you are actually approved to borrow, and whether the remaining downpayment and monthly repayments fit your finances without draining the reserves you may need after moving in. The best choice is not necessarily the lender advertising the lowest rate today. It is the loan structure you can comfortably maintain if your income, expenses, or interest rates change.
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