Does it make sense to take a HDB loan, then switch over to a bank loan immediately?

I'm thinking from the perspective of taking advantage of the lower downpayment required for a HDB loan, then switching to a bank loan for the currently lower interest rates.

Or would one still have to pay a downpayment when switching from a HDB loan to a bank loan?

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Duane Cheng

01 Aug 2020

Financial Consultant at Prudential Assurance Company Singapore

Hi there,

You are not wrong and is actually a good way to work around having a higher downpayment for your BTO/Resale. As HDB loan is approved by HDB, they are not as strict for financing vs the banks.

When you do a switch from HDB loan to a bank loan, that would be called refinancing. Refinancing like loan application, will take into account your TDSR and LTV for your house.

Do note that there are certain things that you will need to do on your own end when switching to a bank loan, such as mortgage insurance, as HPS will not be applicable after refinancing. There will be some cash required upfront, for valuation and legal fees.

Hope i was able to answer your queries!

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