# Switching from an HDB loan to a bank loan: savings, costs & the one-way rule

Published 5 November 2026. By [Cheng Xu](https://btoradar.com/about), BTO Radar.

An HDB concessionary loan is pegged at **0.1 percentage point above the CPF OA rate**, currently **2.6% p.a.** Switching to a bank is irreversible for that flat: a bank loan cannot subsequently be refinanced to HDB ([CPF Board](https://www.cpf.gov.sg/member/infohub/educational-resources/3-differences-between-hdb-loan-and-bank-loan)).

## Monthly instalments at an illustrative 1.65% bank rate

The **1.65% rate is an assumption, not a current bank quote**. Both rates are held constant over the comparison period. These figures measure **instalment cash-flow reductions, not interest savings**: outstanding loan balances after three years will differ.

| Balance and remaining tenure | HDB monthly (2.6%) | Bank monthly (1.65%) | Monthly reduction | 36-month reduction before costs | Calculator |
|---|---|---|---|---|---|
| $250,000 / 20 years | $1,337 | $1,224 | $113 | $4,068 | [Reproduce](https://btoradar.com/tools/hdb-vs-bank-loan?balance=250000&years=20&rate=1.65&costs=1800) |
| $350,000 / 25 years | $1,588 | $1,425 | $163 | $5,868 | [Reproduce](https://btoradar.com/tools/hdb-vs-bank-loan?balance=350000&years=25&rate=1.65&costs=1800) |
| $450,000 / 25 years | $2,042 | $1,832 | $210 | $7,560 | [Reproduce](https://btoradar.com/tools/hdb-vs-bank-loan?balance=450000&years=25&rate=1.65&costs=1800) |
| $550,000 / 25 years | $2,495 | $2,239 | $256 | $9,216 | [Reproduce](https://btoradar.com/tools/hdb-vs-bank-loan?balance=550000&years=25&rate=1.65&costs=1800) |

With **$1,800 assumed net switching costs**, deduct $1,800 from each 36-month reduction. The simple cash-flow break-even is switching costs divided by monthly instalment reduction, rounded up. This does not measure economic break-even after adjusting for the remaining principal.

## Check these terms in the written bank offer

1. **Fees and subsidies**: Legal fees, valuation fees, minimum loan size for a subsidy and subsidy amounts vary by lender. Enter the actual net cost in the [loan comparison calculator](https://btoradar.com/tools/hdb-vs-bank-loan).
2. **Lock-in and subsidy clawback**: Check these separately. Their periods, early-redemption penalties and treatment of repricing or sale depend on your contract; there is no universal three-year rule.
3. **Rate changes**: Fixed rates expire; floating rates change. A single-rate projection does not predict payments after the promotional period.
4. **Eligibility**: MAS exempts refinancing of owner-occupied housing loans from TDSR and MSR, subject to the applicable conditions. Banks still perform credit assessment. Do not assume that every refinancing application must pass the new-purchase ratios ([MAS refinancing rules](https://www.mas.gov.sg/news/media-releases/2016/tdsr-rules-on-refinancing-fine-tuned)).

## Refinancing versus repricing

Refinancing changes your lender and normally requires legal work. Repricing changes the package with your current lender. Compare actual fees, redemption notice periods, processing time and future rates in both written offers. HDB loans have no lock-in or early repayment penalty ([MoneySense](https://www.moneysense.gov.sg/how-home-loans-work/)).