A mortgage — a home loan, in Singapore usage — is money borrowed from HDB or a bank to buy a property, with the property as security and the debt repaid in monthly instalments of principal and interest. An HDB loan costs 2.6% this quarter; bank loans price off fixed rates or 3M Compounded SORA, now 1.20%.
Key takeaways
- An HDB housing loan covers up to 75% of the purchase price (new flat) or the lower of price and value (resale), pro-rated down where the flat’s remaining lease does not cover the youngest buyer to 95.
- The HDB loan rate is pegged at 0.1% above the CPF Ordinary Account rate and reviewed quarterly — 2.6% for 1 Oct – 31 Dec 2026.
- HDB loan eligibility: at least one Singapore Citizen, average gross monthly household income within SGD 16,000 (SGD 24,000 for extended families, SGD 8,000 for singles), and no more than one previous HDB loan.
- Bank home loans are capped at 75% LTV for a first housing loan with at least 5% of the price in cash, and are assessed against a Total Debt Servicing Ratio of 55% — plus a Mortgage Servicing Ratio of 30% on HDB flats and ECs.
- Floating bank packages track 3M Compounded SORA plus a margin; SORA follows interbank funding, not the CPI, so home-loan costs move with US rates rather than Singapore inflation.
How a Singapore home loan works
Each monthly instalment is part interest, part principal. Home loans use monthly rest: interest is charged on the balance still outstanding, so the interest share of an instalment falls every month and the principal share rises. The lender holds a charge over the property; where CPF savings paid for it, the CPF Board holds a second charge and takes its refund first on sale.
Two questions decide the loan: how much the lender may lend against the property (the Loan-to-Value limit) and how much of income may go to servicing it (the TDSR and, for HDB flats and ECs, the MSR).
HDB loan and bank loan, side by side
The same SGD 600,000 flat financed at the 75% limit is a SGD 450,000 loan either way. What differs is the rate, the cash required, the tenure and the tests applied.
| HDB loan | Bank loan | |
|---|---|---|
| Loan-to-Value limit | 75% | 75% (45% with one other housing loan) |
| Minimum cash | none required (CPF OA or cash) | 5% of price at the 75% limit |
| Interest rate | 2.6% (OA rate + 0.1%) | fixed or floating; floating tracks 3M Compounded SORA 1.20% |
| Maximum loan period | 25 years | 30 years (HDB flat) / 35 years (private) |
| Income test | MSR 30% and household income ceiling SGD 16,000 | TDSR 55%; MSR 30% for HDB flats and ECs |
| Switching | can refinance to a bank later | cannot switch back to an HDB loan |
SGD 450,000 over 25 years
Monthly-rest formula on a level instalment. The MSR test uses the higher of the package rate and the 4% floor, which is why the bank test needs more income than the HDB instalment itself suggests.
Where the loan touches a household budget
Five things people get wrong
- HDB — Housing Loan from HDB — eligibility, income ceilings, 75% LTV, loan period rule
- CPF Board — CPF interest rates, Q4 2026 — quarterly OA and SMRA rates, floor extension, extra interest
- MAS — SORA — the benchmark floating home loans track
- MAS — housing loan rules (LTV, TDSR, MSR) — limits on bank housing loans; MAS explainer unreachable on 18 Sep 2026, figures carried from the v1 page pending re-read
Official statistics for general information only. Not financial advice.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to HDB, the CPF Board and MAS and seek independent professional advice before making any financial decisions.