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HDB Property Financing

Financing your HDB property purchase is a significant step in the home-buying process in Singapore. Understanding the various financing options, grants, and schemes available can help you make informed decisions and manage your finances effectively. This guide provides an overview of the key aspects of HDB property financing, including the different types of loans, eligibility criteria, and available grants.


Key Takeaways:

  • Multiple financing options are available for HDB property purchases, including HDB loans and bank loans.
  • Various grants can significantly reduce the financial burden for eligible buyers.
  • Understanding the application process and eligibility criteria for loans and grants is crucial for effective financial planning.


Types of HDB Property Financing

  1. HDB Concessionary Loan: The HDB Concessionary Loan is a popular option for many buyers due to its favorable terms and lower interest rates.
  • Interest Rate: 2.6% per annum (pegged at 0.1% above the prevailing CPF Ordinary Account interest rate).
  • Eligibility:
    • At least one buyer must be a Singapore Citizen.
    • Monthly household income ceiling: SGD 14,000 (families) or SGD 21,000 (extended families).
    • Must not own any private residential property.
    • Must have disposed of any private property at least 30 months before the application.
  • Loan-to-Value (LTV) Ratio: Up to 80% of the purchase price or market valuation, whichever is lower.

The HDB Concessionary Loan is designed to make homeownership more affordable for Singaporeans. Its fixed interest rate provides stability and predictability, making it easier for homeowners to budget for their monthly repayments. Additionally, the high LTV ratio allows buyers to finance a larger portion of their home’s cost, reducing the immediate financial burden.

  1. Bank Loans: Bank loans offer an alternative to HDB loans and come with different terms and conditions. These loans often have variable interest rates and may offer higher loan amounts.
  • Interest Rates: Vary based on market conditions, generally ranging from 1.5% to 3.5% per annum.
  • Eligibility:
    • Must meet the bank’s credit assessment criteria.
    • No specific income ceiling, but banks will assess the borrower’s ability to repay.
  • Loan-to-Value (LTV) Ratio: Up to 75% of the purchase price or market valuation, whichever is lower.
  • Note: Borrowers must pay at least 5% of the purchase price in cash, with the remainder from CPF or cash.

Bank loans offer flexibility in terms of interest rates and repayment structures. While the interest rates may fluctuate with market conditions, they can sometimes be lower than the HDB Concessionary Loan rates. Bank loans are ideal for buyers with stable, high incomes who can manage variable repayments and prefer a higher initial cash outlay.

Grants and Subsidies

  1. Enhanced CPF Housing Grant (EHG): The EHG is available to first-time homebuyers and provides substantial financial support.
  • Amount: Up to SGD 80,000, depending on household income.
  • Eligibility:
    • Monthly household income ceiling: SGD 9,000.
    • At least one applicant must be continuously employed for 12 months prior to the application.
    • The flat must have a remaining lease of at least 20 years.

The EHG is designed to make homeownership more accessible for first-time buyers. By providing a significant grant amount, it reduces the financial burden on young families and singles, helping them secure their first home.


  1. Additional CPF Housing Grant (AHG): The AHG is designed to assist lower-income families in purchasing their first flat.
  • Amount: Up to SGD 40,000, depending on household income.
  • Eligibility:
    • Monthly household income ceiling: SGD 5,000.
    • At least one applicant must be continuously employed for 12 months prior to the application.

The AHG targets lower-income households, offering additional financial support to help them achieve homeownership. This grant can be used in conjunction with other grants to further reduce the cost of buying an HDB flat.


  1. Proximity Housing Grant (PHG): The PHG encourages families to live near or with their parents or children.
  • Amount: Up to SGD 30,000.
  • Eligibility:
    • Must purchase a resale flat within 4 km of parents’ or children’s home, or live together in the same flat.
    • At least one applicant must be a Singapore Citizen.

The PHG aims to strengthen family ties by encouraging multi-generational living arrangements. By providing financial incentives, it helps families stay close together, fostering support networks and shared responsibilities.


  1. Family Grant: The Family Grant provides financial support to families purchasing their first resale flat.
  • Amount: Up to SGD 50,000.
  • Eligibility:
    • Monthly household income ceiling: SGD 14,000 (families) or SGD 21,000 (extended families).
    • At least one applicant must be a Singapore Citizen.

The Family Grant is another valuable resource for first-time homebuyers. It reduces the financial strain of purchasing a resale flat, making it more affordable for families to move into their new homes.

Detailed Comparison of HDB Loans and Bank Loans

Criteria HDB Concessionary Loan Bank Loan
Interest Rate 2.6% p.a. 1.5% – 3.5% p.a. (variable)
LTV Ratio Up to 80% Up to 75%
Income Ceiling SGD 14,000 (families) No specific ceiling, bank assessment
Minimum Cash Downpayment No specific requirement At least 5% of purchase price
Early Repayment Penalty No Yes, typically 1-2% of loan amount

Choosing between an HDB loan and a bank loan depends on your financial situation and preferences. HDB loans offer stability with fixed interest rates and higher LTV ratios, making them a safer choice for those who prefer predictable repayments. On the other hand, bank loans can offer lower initial interest rates but come with variable rates and higher cash downpayment requirements.


Steps to Secure HDB Property Financing

  1. Assess Your Financial Situation: Evaluate your current financial status, including your savings, income, and existing liabilities. Use online calculators to estimate your loan eligibility and monthly repayment amounts.

Understanding your financial health is the first step in securing financing. This assessment will help you determine how much you can afford to borrow and repay comfortably each month without overstretching your budget.

  1. Choose Between HDB Loan and Bank Loan: Compare the terms, interest rates, and eligibility criteria of HDB loans and bank loans. Consider factors such as interest rate stability, repayment flexibility, and initial cash outlay.

Choosing the right loan type is crucial. An HDB loan might be better if you prefer stability and lower initial cash requirements, while a bank loan could be more suitable if you have a higher risk tolerance and prefer potentially lower interest rates.

  1. Check Grant Eligibility: Determine which grants you are eligible for and calculate the total amount you can receive. Ensure that your flat purchase meets the requirements for these grants.

Grants can significantly reduce the financial burden of buying an HDB flat. Check all available grants to maximize your benefits and reduce your overall cost.

  1. Gather Required Documents: Prepare all necessary documents, including identity cards, proof of income, CPF contribution statements, and marriage certificates if applicable.

Having all the required documents ready ensures a smooth application process. Missing documents can delay your application and financing approval.

  1. Apply for Loan: Submit your loan application to HDB or the selected bank. Ensure that you provide accurate information and complete all required forms.

Submitting a complete and accurate loan application increases your chances of approval. Double-check all details before submission to avoid errors that could delay the process.

  1. Receive Loan Approval: Once your loan is approved, review the loan offer carefully. Understand the terms and conditions, including the repayment schedule, interest rates, and any penalties for early repayment.

Carefully reviewing the loan offer helps you understand your financial commitments and ensures there are no surprises later. Make sure you are comfortable with the repayment terms before accepting the offer.

  1. Utilize CPF Savings: Decide how much of your CPF Ordinary Account savings you want to use for the downpayment and monthly loan repayments. CPF funds can significantly reduce your cash outlay.

Using CPF savings for your downpayment and loan repayments can ease your financial burden. Plan how to best utilize these funds to maintain a healthy balance in your CPF account for future needs.

  1. Complete the Purchase: Proceed with the purchase of your HDB flat. Ensure that all financial transactions, including downpayment and stamp duty payments, are completed according to the agreed timeline.

Completing the purchase involves several financial transactions. Ensure all payments are made on time to avoid delays in taking possession of your new home.


Financing your HDB property purchase involves careful planning and understanding of the available options. Whether you choose an HDB concessionary loan or a bank loan, knowing the eligibility criteria, loan terms, and available grants can help you make informed decisions. By assessing your financial situation, choosing the right financing option, and utilizing available grants, you can successfully manage your HDB property purchase and enjoy the benefits of homeownership in Singapore. Thoughtful planning and a clear understanding of your financing options will help ensure a smooth and stress-free home-buying experience.


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