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HDB or Bank loan? (Our 10 cents + NOT financial advice)!
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Today, let's touch on the topic of financing your property. Few things to disclaim: 1) This is not financial advice and we are not financially capable of providing such advice either 2) The focus of this post is to provide a basis of comparison for everyone to make their own sound decision 
For HDB loan, the downpayment is 10% at the point of signing the lease and 15% upon key collection. If you opt for staggered payment scheme, it would be 5% at the point of signing the lease and 20% upon key collection (good for young couples who just graduated from uni and may not have so much cash or CPF monies to utilise). Maximum tenure for the loan is 25 years. For bank loan, 20% of upfront downpayment is required at the point of signing your lease. Out of this 20%, 5% must be paid in cash (cashier's order). Upon key collection, you'll be required to pay another 5% (can be cash or CPF). There's also somewhat of a staggered payment scheme too, where you pay 10% at the point of signing the lease (again, 5% must be in cash) and the remaining 15% upon key collection. Both loans allow you to loan up to 75% of the property price and they will assess whether you are able to qualify for the loan and how much they are willing to loan you (they can't loan you a high amount if your income is not high enough for the monthly mortgage) Useful websites: 1. https://www.cpf.gov.sg/member/infohub/educational-resources/3-differences-between-hdb-loan-and-bank-loan 2. https://www.hdb.gov.sg/residential/buying-a-flat/buying-procedure-for-new-flats/sign-agreement-for-lease 
For interest, HDB loan is always pegged at 0.1% higher than OA's interest returns. If OA's interest returns is 2.5%, then HDB loan would be 2.6%. Unless in the rare circumstances that the OA's interest rate rises, generally HDB loan is 2.6% (hasn't changed for a long time). When it comes to interest rates for bank loan, to be honest, we also don't know how they REALLY determine but it really depends on the market. Is it optimistic? Are there rate cuts? Your interest rate is not fixed. Is it good? --> Maybe? When interest rate is generally low, it can go lower than 2.6%. Has it happen before? --> Recall during covid-19 period, interest rates were around 1.35% Is it possible for bank interest to exceed 2.6%? --> Entirely possible. 
Lock in period is the duration during which you cannot fully repay or refinance the loan without incurring a penalty fee. For HDB loan there is no lock in period and you can choose to make lump sum payments at any time --> paying off the property early will help you save on interest! For bank loan, usually there is a lock in period. Lock in periods varies between packages and banks, so do read up the fine prints where these are specified. 
This is what you need to qualify for the loan. For HDB loan, everything is very transparent on their website (https://www.hdb.gov.sg/residential/buying-a-flat/understanding-your-eligibility-and-housing-loan-options/housing-loan-options/housing-loan-from-hdb) To summarize, at least 1 applicant must be singaporean. If you're buying as a couple, then the combined income must not exceed $14,000 (subjected to review at the time of writing) and $7,000 as a single. For bank loan, the loan amount will be subjected to MSR, which only allows you to use 30% of your assessable income to service your monthly mortgage. It means that for every $1000 you earn, only $300 can be used to pay mortgage. There are some useful calculator for you to use to determine how much you can loan from a bank. (https://www.propertyguru.com.sg/mortgage/calculators/msr) How much will banks loan you? Depends on which is lower (75% LTV or 30% MSR based on your income and a loan tenure of 30 years) 
For those who already choose HDB loan, you may be thinking to switch to bank loan when interest rates are favourable. You can do that, but only 1 time. Once you switch out of HDB loan, you cannot return back! You will also incur lawyer fees (conveyancing fees). For bank loan, you can choose to reprice or refinance after your lock in period is up. You may also incur conveyancing as a result of changing package. All in all, do calculate properly and decide which is more worth it for you. That's all we have for this segment. We hope this is useful to some of you out there who might be pondering over whether to go for HDB loan or bank loan. To be honest, both have their pros and cons, you just got to evaluate your circumstances and take the option that's best for you. Again ah.... this is not financial advice and we are not capable of providing financial advice either! By the time some of you came across this post, some facts here might have already been changed, so do your own research as well! Thanks for reading y'all <3
11 October
