HDB Loan 101: Eligible to take out a HDB Housing Loan?

Check and choose best HDB loans

Most Singaporeans typically would not have much money in their banks based on current spending habits, average household debt, and other factors. Hence, there are a couple of options you may select when it comes to financing your own HDB flat.

Every loan type comes with their own pros and cons that you may wish to consider, but not everyone is suited for this kind of loan, or rather, this loan may not be applicable to everyone. One should take this into serious consideration as long as it is anything in relation to loans as there are interest fees involved and money is a touchy topic so to speak. Additionally, only borrow from banks or licensed money lenders in Singapore. You can read more on how to identify unlicensed money lenders here.

To help save the trouble of many whom are not aware of a housing loan here in Singapore, here are some important factors worth scrutinising before affirming on your choice.

Requirements & Eligibility that must be fulfilled:

While taking out a bank or unsecured loan, the main criteria is still ultimately dependant on how capable are you of making your repayments, Housing loans through HDB has a stringent list of criteria where it is mandatory to be fulfilled.

  • At least one of the buyers has to be a Singaporean.
  • Your average gross monthly income cannot exceed S$10,000 for immediate families, S$15,000 for extended families and S$5,000 for any single who wish to finance a HDB flat of their own.
  • Each person is only able to take up to a maximum of two HDB concessionary loan
  • Borrowers MUST not have any private residential property tied to their name or sold off any within the recent 30 months from date.
  • Buyers of the HDB flat MUST not own more than one single hawker stall, commercial, or industrial property. Even if they are in possession of one, this particular business MUST only be self-operated or be the only sole source of income for the family.

Interest Rates

The interest rates on a HDB loan would be according to the CPF (Central Provident Fund) rate with an additional 0.1% on top of it. The CPF rate calculation is being calculated based on the average of the major local banks over a 3-month period or a minimum of 2.5%; whichever higher.

Utilising CPF Contributions

One added feature that HDB loan borrowers are able to tap into would be their CPF. While bank loan borrowers are needed to make at least 5% of their 20% deposit in terms of cash, HDB loan borrowers would be able to tap into their CPF contributions when it comes to their 10% deposit.

Do you have enough cash?

Minimum Cash Downpayment

The difference between a HDB loan and a bank loan would be the downpayment to be made. While the HDB Concessionary Loan allows one to take up to 90% of the price of the new HDB Flats, whereas for bank loans they are able to allow up to 80% of the loan of the HDB Flat to be taken up. There is a significant amount of difference when it comes to 10% or 20% of a housing loan especially if it is a 10 or 20 percent of a 6 figure amount.


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