How Much Bank Loan Can I Get for My HDB Flat in 2026? Complete Guide

Planning to buy an HDB flat and wondering how much you can borrow from a bank? With interest rates at 3-year lows in 2026, bank loans have become increasingly attractive, offering rates as low as 1.4-1.8% compared to HDB's fixed 2.6%.

Quick Answer: You can borrow up to 75% of your HDB flat's value from a bank, subject to the Mortgage Servicing Ratio (MSR) of 30% and Total Debt Servicing Ratio (TDSR) of 55%. With current low rates, you could save $3,500+ in the first year alone on a $350,000 loan compared to an HDB loan.

This comprehensive guide explains exactly how much you can borrow, how to calculate your loan eligibility, the application process, and whether a bank loan or HDB loan is better for you in 2026.

Why Consider a Bank Loan for Your HDB Flat in 2026?

Bank loans for HDB flats have become exceptionally attractive in 2026 due to historically low interest rates. Here's why thousands of homebuyers are choosing bank loans over HDB loans:

• Lower Interest Rates: Bank rates (1.4-1.8%) are significantly below HDB's 2.6%
• Substantial Savings: Save thousands of dollars in interest over your loan tenure
• Longer Loan Tenure: Up to 30 years vs HDB's 25 years maximum
• Flexibility: Multiple packages and refinancing options
• Competitive Market: Banks are competing aggressively for borrowers

Current Bank Loan Interest Rates (2026)

Understanding current interest rates is crucial for making an informed decision. Here's what banks are offering in early 2026:

Fixed-Rate Packages

Fixed-rate packages lock in your interest rate for a specific period (typically 1-5 years), protecting you from rate fluctuations:

Floating-Rate Packages (SORA-Based)

Floating-rate packages are tied to the Singapore Overnight Rate Average (SORA), offering flexibility:

• 3M SORA + 0.25% to 0.40%: Approximately 1.36% to 1.60% as of Q1 2026
• Rate Review: Monthly or quarterly adjustments based on SORA movements
• Current 3M SORA: ~1.2% (down from 3% in early 2025)

HDB Loan Rate Comparison

The gap between bank loans and HDB loans has widened significantly, creating substantial savings opportunities for borrowers.

Bank Loan Eligibility: Can You Qualify?

Before calculating how much you can borrow, ensure you meet the basic eligibility requirements:

• Singapore Citizen, Permanent Resident, or foreigner (eligibility varies by bank)
• Minimum age 21 years old
• Steady income with employment verification
• Good credit score (typically 700+ for best rates)
• Property must be eligible for financing (HDB flat, EC, or private)
• Meet MSR (30%) and TDSR (55%) requirements

How Your Bank Loan Amount is Calculated

Your maximum bank loan amount is determined by three key factors. Banks will approve the lowest amount among these calculations:

1. Loan-to-Value (LTV) Limit: Maximum 75% of property value
2. Mortgage Servicing Ratio (MSR): Monthly repayment ≤ 30% of gross income
3. Total Debt Servicing Ratio (TDSR): Total debt obligations ≤ 55% of gross income

1. Loan-to-Value (LTV) Limit: 75%

The LTV limit caps your loan at 75% of your property's purchase price or valuation (whichever is lower). This means you need a 25% downpayment.

Example:

• Purchase Price: $500,000
• Valuation: $480,000
• Lower value: $480,000
• Maximum Loan (75%): $360,000
• Downpayment Required (25%): $120,000

2. Mortgage Servicing Ratio (MSR): 30% of Income

MSR applies to HDB flats and Executive Condominiums (ECs), limiting your monthly housing loan repayment to 30% of your gross monthly income.

MSR Formula:
Maximum Monthly Installment = Gross Monthly Income × 30%

MSR Calculation Example

Single Applicant:

• Gross Monthly Income: $6,000
• MSR Limit (30%): $1,800
• Loan Tenure: 25 years
• Interest Rate: 1.6% p.a. (bank loan)
• Maximum Loan Amount: ~$403,000

Joint Applicant:

• Combined Gross Income: $10,000
• MSR Limit (30%): $3,000
• Loan Tenure: 25 years
• Interest Rate: 1.6% p.a.
• Maximum Loan Amount: ~$671,000

3. Total Debt Servicing Ratio (TDSR): 55% of Income

TDSR applies to all property loans and caps your total monthly debt obligations—including your mortgage, car loans, personal loans, credit card payments, and student loans—at 55% of your gross monthly income.

TDSR Formula:
Total Monthly Debt Obligations ≤ Gross Monthly Income × 55%

TDSR Calculation Example

Let's see how existing debts affect your borrowing capacity:

Scenario:

• Gross Monthly Income: $6,000
• TDSR Limit (55%): $3,300
• Existing Car Loan: $800/month
• Credit Card Minimum: $200/month
• Total Existing Debts: $1,000/month
• Available for Housing Loan: $2,300/month
• Loan Tenure: 25 years, Rate: 1.6%
• Maximum Loan: ~$515,000

The 4% Stress Test: A Hidden Constraint

Banks must stress-test your loan eligibility using a minimum interest rate of 4% (or the prevailing rate, whichever is higher) when calculating MSR and TDSR, even if the actual rate is lower.

This means even though you might be paying 1.6%, the bank calculates your affordability assuming 4% to ensure you can still service the loan if rates rise significantly.

Impact Example:

The stress test significantly reduces your approved loan amount, ensuring you have a buffer for rate increases.

Variable Income Consideration

If you receive variable income (commissions, bonuses, allowances), banks typically count only 70% of this variable income when calculating MSR and TDSR.

Example:

• Fixed Salary: $5,000
• Variable Bonus/Commission: $2,000
• Countable Variable Income (70%): $1,400
• Total Considered Income: $6,400
• MSR Limit (30%): $1,920

Real-World Loan Calculation Examples

Let's work through comprehensive examples to show exactly how much you can borrow in different scenarios:

Example 1: Single Applicant, No Existing Debts

• Gross Monthly Income: $5,500
• Existing Debts: $0
• Property Value: $450,000
• Desired Loan Tenure: 25 years
• Bank Rate: 1.6% (actual), 4% (stress test)

Calculations:

1. LTV Limit (75%): $450,000 × 75% = $337,500
2. MSR Limit (30%): $5,500 × 30% = $1,650/month → ~$267,000 loan at 4% stress test
3. TDSR Limit (55%): $5,500 × 55% = $3,025/month → ~$490,000 loan at 4% stress test

Approved Loan: $267,000 (lowest of the three)
Limiting Factor: MSR (30% of income)

Example 2: Joint Applicants, With Existing Debts

• Combined Gross Income: $9,000
• Car Loan: $700/month
• Personal Loan: $300/month
• Total Existing Debts: $1,000/month
• Property Value: $550,000
• Loan Tenure: 30 years
• Bank Rate: 1.6% (actual), 4% (stress test)

Calculations:

1. LTV Limit (75%): $550,000 × 75% = $412,500
2. MSR Limit (30%): $9,000 × 30% = $2,700/month → ~$506,000 loan at 4% stress test (30 years)
3. TDSR Limit (55%): ($9,000 × 55%) - $1,000 = $3,950/month available → ~$741,000 loan at 4% stress test (30 years)

Approved Loan: $412,500 (lowest of the three)
Limiting Factor: LTV (75% cap)

Example 3: High Income, High Debts

• Gross Monthly Income: $12,000
• Car Loan: $1,200/month
• Credit Cards: $500/month
• Investment Property Loan: $2,000/month
• Total Existing Debts: $3,700/month
• Property Value: $600,000
• Loan Tenure: 25 years

Calculations:

1. LTV Limit (75%): $600,000 × 75% = $450,000
2. MSR Limit (30%): $12,000 × 30% = $3,600/month → ~$583,000 loan at 4% stress test
3. TDSR Limit (55%): ($12,000 × 55%) - $3,700 = $2,900/month available → ~$470,000 loan at 4% stress test

Approved Loan: $450,000 (lowest of the three)
Limiting Factor: LTV, though TDSR is close ($470,000)

Despite high income, existing debts significantly reduce borrowing capacity. Clearing debts before applying would increase the loan quantum.

Downpayment Requirements for Bank Loans

Understanding the downpayment structure is crucial. Bank loans have stricter cash requirements compared to HDB loans:

Downpayment Example for $500,000 Property

Bank Loan Downpayment:

• Total Downpayment (25%): $125,000
• Mandatory Cash Component (5%): $25,000
• Remaining (20%): $100,000 (can use CPF or cash)
• Maximum Loan (75%): $375,000

HDB Loan Downpayment (for comparison):

• Total Downpayment (25%): $120,000 (based on valuation)
• Mandatory Cash: $0
• Can use CPF: Up to 100% of downpayment
• Maximum Loan (75%): $360,000

Types of Bank Loan Packages in 2026

Banks offer various loan packages to suit different risk profiles and financial goals. Understanding these options helps you choose the best fit:

1. Fixed-Rate Packages

How it works: Interest rate is locked in for a specific period (1-5 years), then typically converts to a floating rate.

Pros:

• Predictable monthly payments
• Protection from rate increases
• Easy budgeting
• Peace of mind

Cons:

• Can't benefit if rates fall further
• May pay higher rates than floating packages
• Lock-in period with penalties

Best for: Risk-averse borrowers, first-time buyers, those planning short to medium-term ownership (3-5 years).

2. Floating-Rate Packages (SORA-Based)

How it works: Interest rate = SORA + Bank Spread (e.g., 3M SORA + 0.35%). Rate adjusts monthly or quarterly based on SORA movements.

Pros:

• Currently lowest rates available (1.36-1.60%)
• Benefit when rates fall
• More flexibility
• Shorter lock-in periods (typically 1 year)

Cons:

• Monthly payments can fluctuate
• Risk of rate increases
• Requires monitoring
• Budgeting uncertainty

Best for: Financially savvy borrowers, those expecting rates to remain low, borrowers with income flexibility.

3. Board Rate Packages

How it works: Interest rate is based on the bank's internal board rate, which the bank can adjust at its discretion.

Pros:

• Sometimes lower initial rates
• Established track record

Cons:

• Less transparent than SORA
• Banks control rate adjustments
• Can be higher than SORA-based packages
• Less predictable

Best for: Borrowers with existing relationship with bank, those who prefer familiar structures.

4. Hybrid Packages

How it works: Combines fixed and floating rates. For example, fixed for the first 3 years, then converts to SORA-based floating rate.

Best for: Borrowers seeking initial stability with future flexibility.

Top Banks for HDB Loans (2026)

Step-by-Step: How to Apply for a Bank Loan

The bank loan application process is typically faster than HDB loans (2-4 weeks vs 2-4 months). Here's the complete process:

1. Get In-Principle Approval (IPA)
   Before house hunting, apply for IPA from 2-3 banks. This indicates how much you can borrow and shows sellers you're serious. Required: NRIC, income documents, CPF statements. Timeframe: 1-3 days.
2. Compare Loan Packages
   Review offers from different banks. Compare interest rates, lock-in periods, legal subsidy, and total cost over loan tenure. Use online comparison tools or engage a mortgage broker.
3. Find Your HDB Flat
   With IPA in hand, search for flats within your budget. The IPA is typically valid for 1-3 months (varies by bank).
4. Exercise Option to Purchase (OTP)
   Pay the option fee (typically 1% or $1,000-$5,000) to secure the flat. You have 21 days (or as stated in OTP) to complete financing.
5. Submit Full Loan Application
   Submit complete application with all required documents within OTP period. Required documents include:
   • NRIC/passport (all applicants)
   • Latest 3 months' payslips
   • CPF contribution history
   • Latest Income Tax Notice of Assessment
   • Bank statements (6 months)
   • Employment letter
   • Option to Purchase
   • Property valuation report
   • Existing loan statements (if any)
6. Property Valuation
   Bank arranges independent valuation of the property. Cost: $200-$400 (sometimes subsidized by bank). Timeframe: 3-5 days.
7. Bank Approval & Letter of Offer
   Bank assesses your application and issues Letter of Offer stating approved loan amount, interest rate, and terms. Timeframe: 1-2 weeks.
8. Accept Loan Offer & Engage Lawyer
   Sign and return the Letter of Offer. Engage a lawyer for conveyancing (some banks provide legal subsidy of $2,000-$3,000).
9. Sign Loan Agreement
   Sign the formal loan agreement at the bank. Pay stamp duty and legal fees.
10. Loan Disbursement
    Upon completion of sale, bank disburses the loan to the seller. You receive the keys to your new home!

Bank Loan vs HDB Loan: The Ultimate Comparison

This is the critical decision: should you take a bank loan or stick with an HDB loan? Here's the most comprehensive comparison:

*Foreigners cannot buy HDB flats except in limited resale scenarios with HDB approval.

Total Cost Comparison Over 25 Years

Let's compare the actual cost for a $350,000 loan over 25 years:

In this scenario, choosing a bank loan at an average 1.6% saves you $45,000 over 25 years compared to an HDB loan at 2.6%. That's $1,800 per year or $150 per month.

First-Year Savings Comparison

For a $350,000 loan, here's what you'd pay in the first year:

You save approximately $3,500 in interest in just the first year alone with a bank loan at current rates.

When to Choose a Bank Loan

Bank loans are advantageous in these scenarios:

• ✅ Current rates are significantly lower: With bank rates at 1.4-1.8% vs HDB's 2.6%, the savings are substantial
• ✅ You have 5% cash available: You can meet the mandatory cash downpayment requirement
• ✅ You want maximum loan tenure: Need 30 years instead of HDB's 25-year limit to lower monthly payments
• ✅ Good credit score: You qualify for the best rates (typically 700+ credit score)
• ✅ You're financially savvy: Comfortable monitoring rates and potentially refinancing
• ✅ Planning to sell within 3-5 years: Lock in low rates for short-term ownership
• ✅ You want flexibility: May refinance to better packages in the future
• ✅ Quick approval needed: Bank loans process in 2-4 weeks vs HDB's 2-4 months

When to Choose an HDB Loan

HDB loans remain the better choice in these situations:

• ✅ You prefer absolute stability: Fixed rate that only changes quarterly, protection from volatility
• ✅ Limited cash for downpayment: Can use 100% CPF for the entire 25% downpayment
• ✅ Risk-averse personality: Don't want to worry about rate fluctuations
• ✅ First-time buyer: Want simplicity and predictability
• ✅ Planning long-term ownership: Will hold the property for 15-30+ years
• ✅ No lock-in period preference: Want freedom to pay off loan anytime without penalties
• ✅ Weaker credit history: May not qualify for best bank rates
• ✅ Conservative financial planning: Prefer guaranteed rates over potential savings

Decision Framework: Which Loan Should You Choose?

Use this decision tree to help you decide:

1. Do you have at least 5% cash for downpayment?
   NO → HDB Loan
   YES → Continue to Q2
2. Is your credit score 700+?
   NO → Consider HDB Loan (may not get best bank rates)
   YES → Continue to Q3
3. Are you comfortable with rate fluctuations?
   NO → HDB Loan
   YES → Continue to Q4
4. Planning to hold property for how long?
   3-7 years → Bank Loan (lock in current low rates)
   15-30+ years → Consider HDB Loan (long-term stability)
   Unsure → Consider HDB Loan
5. Current savings potential worth the risk?
   With $3,500+ annual savings potential, many choose bank loans
   Final decision: Consider your risk tolerance and financial goals

Tips to Maximize Your Bank Loan Amount

Want to borrow more? Implement these strategies to increase your loan eligibility:

1. Improve Your Credit Score

A higher credit score (750+) not only increases approval chances but can also secure better interest rates:

• Pay all bills on time (most important factor)
• Keep credit card utilization below 30%
• Don't close old credit cards (longer credit history helps)
• Avoid multiple loan applications within short period
• Dispute any errors on your credit report
• Pay off small debts completely

2. Clear or Reduce Existing Debts

Since TDSR caps total debts at 55%, reducing existing obligations directly increases your housing loan capacity:

Priority Order:

1. Credit card debt (highest interest, affects credit score)
2. Personal loans
3. Car loans (if you can manage without, or downgrade)
4. Other housing loans (if selling investment property)

Impact Example: Clearing a $500/month car loan on a $8,000 income increases your TDSR allowance from $3,900 to $4,400, potentially adding $100,000+ to your loan capacity.

3. Include Variable Income with Proof

Banks count 70% of proven variable income (bonuses, commissions). Provide comprehensive documentation:

• Past 12 months of payslips showing bonuses
• Commission statements
• Income tax assessments reflecting variable income
• Employment contract showing bonus structure
• Bank statements showing consistent deposits

4. Apply Jointly with Spouse/Family

Joint applications combine incomes for MSR and TDSR calculations:

• Both incomes count toward the 30% MSR limit
• Both incomes count toward the 55% TDSR limit
• But BOTH applicants' debts are also included
• LTV limit (75%) remains unchanged regardless of applicants

Best Co-Applicants: Spouse > Parents > Siblings > Children (21+)

5. Optimize Your Loan Tenure

Longer loan tenure reduces monthly payments, helping you pass MSR/TDSR:

Going from 25 to 30 years reduces monthly payments by $166, making it easier to qualify under MSR. However, you'll pay $26,100 more in interest over the life of the loan.

6. Negotiate with Multiple Banks

Don't settle for the first offer. In 2026's competitive market, banks are eager for borrowers:

• Get IPA from 3-4 banks simultaneously
• Use lower offers to negotiate better rates
• Ask about legal fee subsidies ($2,000-$3,000)
• Request cashback or rebate programs
• Leverage existing banking relationships
• Consider mortgage brokers (free service, bank-paid)

7. Time Your Application Strategically

• Apply after receiving year-end bonuses (increases considered income)
• Ensure latest CPF statements show maximum balance
• Wait until probation ends if recently changed jobs
• Clear small debts before application
• Avoid big purchases (car, renovation loans) before applying

Common Questions About Bank Loans for HDB Flats

Can PRs get bank loans for HDB flats?

Yes, Singapore Permanent Residents can obtain bank loans for HDB flats. However, PR eligibility for purchasing HDB flats themselves is restricted to resale flats only (not BTO). Banks treat PR applications similarly to citizens for loan approval, though some may have slightly different terms.

What if I fail the TDSR calculation?

If your existing debts push you beyond the 55% TDSR limit, you have several options:

1. Clear existing debts: Pay off loans to reduce monthly obligations
2. Increase income: Get a raise, promotion, or add a co-borrower
3. Lower loan amount: Increase downpayment or buy a cheaper property
4. Extend loan tenure: 30 years instead of 25 reduces monthly payment
5. Wait and reapply: After improving your debt situation

Can I refinance from HDB loan to bank loan?

Yes, you can refinance from an HDB loan to a bank loan at any time with no penalties (HDB loans have no lock-in period). Many homeowners are doing this in 2026 to take advantage of low bank rates. However, you must meet the bank's credit criteria and TDSR requirements, and remember you CANNOT refinance back to an HDB loan later.

What happens during the lock-in period?

The lock-in period (typically 1-3 years) restricts you from:

• Refinancing to another bank
• Fully repaying your loan
• Making large partial repayments (varies by bank)

If you break the lock-in by refinancing or repaying early, you'll face penalties typically ranging from 1.5% of the outstanding loan amount or equivalent to the interest savings, whichever is higher.

Example: $400,000 outstanding loan × 1.5% = $6,000 penalty

How does the 4% stress test affect my loan?

Banks calculate your MSR and TDSR using a minimum 4% interest rate (or prevailing rate + 3%, whichever is higher) even if the actual rate is 1.6%. This stress test ensures you can still afford repayments if rates rise.

This means your approved loan will be significantly lower than what you could theoretically afford at the actual rate, providing a safety buffer.

Can I use CPF for bank loan repayments?

Yes, you can use your CPF Ordinary Account (OA) to service bank loan monthly repayments, just like with HDB loans. You can also use CPF for:

• Downpayment (but minimum 5% must be cash)
• Monthly installments
• Stamp duty and legal fees

When you sell the property, you must refund the CPF principal used plus accrued interest at 2.5% p.a.

What if SORA rates increase significantly?

If you take a SORA-based floating rate package and SORA increases, your interest rate and monthly payments will rise accordingly. For example:

To mitigate this risk:

• Keep buffer in your budget for rate increases
• Consider fixed-rate packages if you prefer certainty
• Monitor SORA trends and refinance if needed (after lock-in)
• Remember the 4% stress test means you've been approved for higher rates

Are bank loan rates negotiable?

Yes! In 2026's competitive market, banks are willing to negotiate, especially if:

• You have multiple loan offers from other banks
• You're an existing customer with significant deposits/investments
• You have excellent credit (750+ score)
• You're borrowing a large amount ($500k+)
• You're willing to commit to other banking products

Typical negotiable items: Interest rate spread, legal fee subsidy, lock-in period, cashback amounts.

Take Action: Make an Informed Decision

Choosing between a bank loan and HDB loan is one of the most significant financial decisions you'll make. With bank rates at 3-year lows in 2026, the opportunity to save tens of thousands of dollars in interest is real—but so are the risks of rate volatility.

Key Takeaways:

• Bank loans currently offer 1.4-1.8% vs HDB's 2.6%, creating potential savings of $3,500+ annually
• Your maximum loan is limited by the lower of: 75% LTV, 30% MSR, or 55% TDSR (with 4% stress test)
• Bank loans require minimum 5% cash downpayment vs HDB's 100% CPF allowance
• You can refinance from HDB to bank but NOT from bank back to HDB
• SORA-based floating packages offer lowest current rates but carry rate risk
• Fixed packages provide stability and predictability for 1-5 years
• Application takes 2-4 weeks with banks vs 2-4 months with HDB
• In 2026's low-rate environment, bank loans are highly attractive for financially savvy borrowers

Ready to find out exactly how much you can borrow? Use our comprehensive calculator to get instant results based on your income, property value, and loan preferences. Compare HDB vs bank loan scenarios side-by-side.

Have specific questions about your unique situation? Our AI financial assistant Rich can provide personalized guidance on choosing between bank and HDB loans, optimizing your application, and planning your home financing strategy.

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References & Sources

This guide is based on information from official sources and reputable financial institutions:

1. Monetary Authority of Singapore (MAS): Mortgage Servicing Ratio and Total Debt Servicing Ratio Rules
2. MAS SORA Information: SORA Interest Rate Benchmark
3. CPF Board: 3 Differences Between an HDB Loan and a Bank Loan
4. HDB: CPF Interest Rates from 1 January to 31 March 2026
5. DBS Bank: What You Need to Know Before Getting a Home Loan
6. DollarBack Mortgage: What is TDSR Singapore 2025?
7. Homejourney: HDB Loan vs Bank Loan 2026: Which Saves You More Money?
8. MoneySmart: HDB Loans vs Bank Loans: What's The Difference
9. OhMyHome: A 2026 Guide to MSR and TDSR with Sample Calculations
10. HousingLoanSG: TDSR and MSR for Property Loan in Singapore

Related Resources:

• How Much HDB Loan Can I Get in 2026? Complete Guide
• HDB Loan Calculator - Calculate Your Eligibility
• CPF Contribution Calculator

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Disclaimer: The information provided is accurate as of February 2026 and is for educational purposes only. Interest rates, policies, and bank offerings are subject to change. SORA rates fluctuate based on market conditions. Always verify current rates and terms directly with banks and consult a licensed financial advisor for personalized advice. Loan approval is subject to bank's credit assessment.