The best home loan in Singapore is the one that costs you the least total interest over the years you actually hold it, after lock-in penalties and fees. For an HDB flat, that means comparing HDB’s own loan, at 2.6% a year in November 2026, with bank packages. For private property, it means comparing banks with each other.
No single bank wins for everyone, and bank rates change weekly. So this page explains the types of package, shows one published package against the HDB rate in dollars, and lists the questions that decide which is cheaper for you.
A caution on borrowing: a home loan is likely to be the largest debt you ever take, over 25 to 30 years. Leave room in your budget for rates to rise and income to dip.
How We Looked for the Best Home Loan in Singapore
We read HDB’s loan guide and DBS’s HDB and private property loan pages in November 2026, plus MAS’s rules on loan limits. DBS was the only main bank whose package rates were published on a page we could read; most banks quote home loan rates on request.
We do not rank banks. We quote one published package to show the arithmetic, with its date. Packages, including that one, change often. Promotions, gifts and cash rewards are left out.
HDB Loan or Bank Loan: The Short Version
HDB’s loan guide sets out the differences:
- Rate: HDB charges 0.1 point above the CPF Ordinary Account rate, now 2.6%. Banks set their own, fixed or floating.
- Maximum loan: 75% for both, of the price (new flat) or the lower of price and valuation (resale).
- Tenure: up to 25 years with HDB; up to 30 years with a bank for an HDB flat.
- Downpayment: with HDB it can be paid entirely from CPF. With a bank, at least 5% of the price must be cash.
- Early repayment: no penalty with HDB. Banks usually have a lock-in.
- Switching: you can refinance from HDB to a bank, but never back.
HDB also requires you to use your CPF savings before lending, though each buyer may keep up to $20,000 in the OA. We cover that choice in detail in HDB loan vs bank loan.
Fixed, Floating and SORA-Pegged Packages
| Package type | What sets the rate | Instalment | Typical lock-in | Who carries the rate risk |
|---|---|---|---|---|
| HDB loan | CPF OA rate plus 0.1 point, reviewed quarterly | Changes only if the OA rate changes | None | Mostly HDB; the OA rate has a 2.5% legal floor |
| Fixed for 2 to 3 years | Set by the bank at signing, then usually floating | Fixed in the early years | Often 2 to 3 years | The bank in the fixed years, you afterwards |
| SORA-pegged floating | 3-month compounded SORA plus a spread | Moves with SORA | Often 1 to 3 years, sometimes none | You |
| Bank board or deposit-linked rate | A reference rate the bank sets, such as DBS’s FHR, linked to its fixed deposit rates | Moves when the bank changes it | Varies | You, and the bank controls the benchmark |
| CPF-OA-pegged bank package | A margin below the CPF OA rate | Changes if the OA rate changes | Example: 3 years | Shared; follows the OA rate |
SORA is published by MAS daily from actual interbank borrowing. Three-month compounded SORA looks back over the previous three months, so it changes gradually. A package priced at “3M SORA + 0.30%” costs whatever SORA does plus 0.30.
A Worked Example in Dollars
Take an illustrative $500,000 loan over 25 years for an HDB flat. Our own scenario.
HDB loan at 2.6%: $2,268 a month; total interest about $180,500.
A published bank package. On 13 November 2026, DBS’s HDB loan page listed a 3-year CPF-OA package: 1.78% for years 1 to 3, 2.20% for years 4 and 5, 2.40% after, each pegged below the 2.5% OA rate. Minimum loan $100,000. Assuming the OA rate stays at 2.5% for 25 years:
- Instalment: about $2,066 a month in years 1 to 3, rising to about $2,197
- Total interest: about $153,500, roughly $27,000 less than at 2.6%
Floating scenarios, if a SORA package averaged:
- 3.0%: $2,371 a month; interest about $211,300
- 3.5%: $2,503 a month; interest about $250,900
- 4.5%: $2,779 a month; interest about $333,700
Each 0.5 point on the average rate adds roughly $130 a month and $40,000 over 25 years on this loan. Illustration only, not a forecast. Our mortgage repayment calculator runs other rates and terms.
The short version: Compare packages on total interest over the period you expect to keep the loan, then check the lock-in, the rate after the first years and whether you can switch free. An HDB loan is the safe baseline; a bank loan cannot be moved back to it.
The Limits on How Much You Can Borrow
MAS rules cap the loan whatever the rate:
- Total Debt Servicing Ratio (TDSR): all monthly debt repayments, at most 55% of gross monthly income, for loans from financial institutions.
- Mortgage Servicing Ratio (MSR): property loan repayments, at most 30% of gross monthly income, for HDB flats and new ECs. HDB applies 30% to its own loans too.
- Stress test: banks calculate with a floor rate of 4% for residential loans; HDB loans use the higher of 3% or 0.1 point above the OA rate.
- Loan-to-value: up to 75% on a first loan, falling to 55% if the tenure exceeds 25 years for an HDB flat or 30 years otherwise, or runs past age 65. See MAS’s LTV table.
On our $500,000, 25-year example, a bank tests the instalment at 4%: $2,639 a month. Under the 30% MSR, that needs about $8,800 a month in gross household income. Our home affordability calculator works this out with your own figures.
Questions to Ask Every Lender
- What is the rate in each year, and what is it after the fixed or promotional period?
- How long is the lock-in, and what is the penalty? Is it waived if I sell?
- Is there a clawback of legal or valuation subsidies if I refinance within a set period?
- Can I make partial prepayments, and how much, without a fee?
- Can I reprice to another package with the same bank, and at what cost?
When the lock-in ends, compare again. Our refinancing savings calculator shows the break-even on switching. Owners who later need cash against the home can read about home equity loans.
What To Do Next
- Get your HDB Flat Eligibility letter or a bank’s in-principle approval to see the loan amount you qualify for.
- Ask at least three lenders for written quotes on the same loan amount and tenure, including year-by-year rates.
- Model total interest over five years and over the full term in our mortgage repayment calculator.
- Check how much CPF you can use in how much CPF you can use for housing, and estimate stamp duty with our stamp duty calculator.
- Read our step-by-step guide on how to buy a house in Singapore for the order in which loan, option and stamp duty fall due.
