HDB or Bank Loan

Ted from Redbrick shares with us the main factors to consider while taking up a home loan for your HDB flat, and the main differences between taking up a HDB loan and a bank loan.

If you're a new home owner and you have not really thought about the kind of loan to take up, you might be finding it hard to make a choice between a HDB or bank loan, provided you are eligible for them.

Ted empathises that, "Buying a HDB flat for the first time can be an intimidating experience. It’s probably the first big ticket purchase in your life that will take the next couple of decades to pay off, so you’d definitely want to rake in as much savings as you can."

He continues, "You might want to hold on to your cash and pay off your home loans using your CPF, but did you know that taking up a bank loan allows you to pay less interest? This is because bank interest rates are lower as compared to the CPF Ordinary Account (OA) interest rate which home loans are pegged to. HDB interest rate is at 2.6% whereas bank loan interest rate is as low as 1% (depending on your specific package) as reflected in the infographic. Therefore, home owners looking at saving money in mortgage interest should definitely consider bank loan. Of course the downside is that you need to pay 20% of flat purchase price as down payment. You will need to have sufficient cash on hand to opt for bank loan."

For the more visual people like us, Ted shares a handy dandy infographic that will walk you through this important decision.

To find out more about the pros and cons taking up a bank loan vs. a HDB loan, refer to Redbrick's full guide.


About Our Guest Blogger
Ted Chong
Redbrick Mortgage Advisory


Redbrick has more than 60 years of banking experience and is proficient in structuring and sourcing for the best financing terms for both residential and commercial real estate in Singapore, Malaysia, USA, UK, Japan, Thailand and Australia.


We hope you've gleaned insights from this article What Every Singapore New Home Owner Should Know About HDB Vs Bank Loan. May you build a home where love resides, memories are created, friends always belong, and laughter never ends.

If you would like to guest blog on Miraculove, write in to us at hello@miraculove.com!

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