In September 2026 the 3-month compounded SORA sits at 1.19%, down from roughly 3.07% at the start of 2025. Bank home loans have followed it down: the lowest private floating package is 1.39% (Maybank, 3M SORA + 0.20%), the lowest two-year fixed is 1.40% at HSBC and Citi, and HDB packages start at 1.44% floating (UOB) and 1.60% fixed (OCBC).
Which produces the fact that decides this page: the HDB concessionary loan at 2.60% — pegged since 1999 at 0.1 point above the CPF Ordinary Account rate — is now the most expensive home loan a Singaporean can take. On a S$400,000 loan over 25 years it costs S$216.81 more a month than an OCBC HDB floating package at 1.49%, and S$65,043 more over the full tenure.
What the lenders are quoting
| Lender | Package | Rate p.a. |
|---|---|---|
| Maybank | Private, floating | 1.39% (3M SORA + 0.20%) |
| HSBC, Citi | Private condo, 2-year fixed | 1.40% |
| UOB | HDB, floating | 1.44% (3M SORA + 0.25%) |
| DBS / POSB | Floating, FHR6 + 0.65% | from 1.45% |
| OCBC | HDB, floating | 1.49% (3M SORA + 0.30%) |
| OCBC | HDB, 2-year fixed | 1.60% |
| UOB, Hong Leong Finance | 2-year fixed | 1.65% - 1.85% |
| DBS / POSB | 2-year fixed | 1.78% |
| OCBC | Standard floating | 1.90% (3M SORA + 0.70%) |
| HDB | Concessionary loan | 2.60% |
Read the floating rows as their two parts. The SORA component is identical for everyone and moves with the market; the spread is what the bank charges and what you actually negotiate. Between Maybank at SORA + 0.20% and OCBC standard at SORA + 0.70% there are 50 basis points of pure margin on the same index.
S$400,000 over 25 years: what the gap costs
| Package | Monthly | Total repaid | Interest |
|---|---|---|---|
| OCBC HDB floating 1.49% | S$1,597.87 | S$479,360 | S$79,360 |
| OCBC HDB fixed 1.60% | S$1,618.61 | S$485,582 | S$85,582 |
| DBS fixed 1.78% | S$1,652.90 | S$495,871 | S$95,871 |
| HDB concessionary 2.60% | S$1,814.68 | S$544,403 | S$144,403 |
The comparison assumes the floating rate stays where it is for the whole tenure, which it will not — that is the honest caveat. But the bank package would have to average above 2.60% for the next 25 years for the HDB loan to win on cost, and SORA would have to more than double from today’s 1.19% to get there.
September 2026 update: how far SORA has actually fallen
The size of the move is what makes this year unusual. The 3-month compounded SORA opened 2025 at roughly 3.07%, fell to 1.19% by December 2025 and is still at 1.19% in September 2026. Everything in the table above is a consequence of that one series, because every floating package is quoted as SORA plus a fixed spread.
| Benchmark | Level | Period |
|---|---|---|
| 3-month compounded SORA | about 3.07% | early 2025 |
| 3-month compounded SORA | 1.19% | December 2025 |
| 3-month compounded SORA | 1.19% | September 2026 |
| HDB concessionary rate | 2.60% | unchanged since 1999 |
A borrower on SORA + 0.30% has therefore seen the rate fall from about 3.37% to 1.49% without doing anything, while a borrower on the HDB loan has paid 2.60% throughout. That is the clearest illustration of what the fixed peg actually buys: protection when the market is above 2.60%, and a bill when it is below.
The switch is one-way, and that is the real decision
You may move from an HDB concessionary loan to a bank loan. You may never move back. That irreversibility, not the rate, is what you are actually deciding, because the HDB loan carries three things no bank package offers:
- No cash downpayment. The HDB loan allows the downpayment to be paid entirely from CPF Ordinary Account savings; a bank loan requires a minimum 5% in cash, with the remaining 20% from CPF or cash.
- No prepayment penalty. Partial prepayment or full redemption costs S$0 at HDB; banks typically charge 1.5% during the lock-in period — S$6,000 on a S$400,000 loan.
- Payment leniency. HDB offers materially softer arrangements if you fall behind; a bank enforces collection and reports it.
The LTV limit is the same 75% either way, so that is not a differentiator. Nor is stability an abstraction: the HDB rate has been 2.60% since 1999, while a bank borrower repices or refinances every two to three years and pays legal and valuation fees each time — or quietly rolls onto the bank’s expensive reversion rate when the teaser expires. On the numbers above, S$216.81 a month buys back that entire administrative burden plus the option to return, and the question is whether that is a price worth paying for your household.
What you have to pass before any of this matters
| Rule | Limit | What it applies to |
|---|---|---|
| Total Debt Servicing Ratio | 55% of gross monthly income | all property loans, all debts included |
| Mortgage Servicing Ratio | 30% of gross monthly income | HDB flats and executive condominiums |
| Loan-to-Value | 75% | HDB loan and bank loan alike |
| Medium-term interest rate floor | 4% | the rate banks must use in the TDSR and MSR calculation |
The last line is the one that surprises applicants. Your affordability is not assessed at the 1.49% you are being offered — the bank must compute TDSR and MSR at a floor of 4%. So the loan you qualify for is sized as though rates were nearly three times today’s level, and a cheap package does not enlarge your borrowing capacity by a single dollar. Clearing existing commitments does, because everything you owe counts inside the 55%.
How to run the decision
- Compare spreads, not rates, on floating packages. SORA is identical everywhere; the spread ranges from 0.20% to 0.70% and is the only negotiable part.
- Ask what happens after the teaser period — the reversion rate, in writing, and the lock-in length.
- Price the lock-in penalty against your plans. 1.5% on S$400,000 is S$6,000 if you sell or redeem early.
- If you are buying an HDB flat and short of cash, remember the bank route needs 5% in cash that the HDB route does not.
- Treat the HDB-to-bank move as final. There is no route back at any price.
- Compute your own TDSR at 4%, not at the offered rate, before you shortlist properties.
All rates are packages advertised in September 2026 and move with SORA; the TDSR, MSR, LTV and the 4% floor are regulatory and change far more slowly. If you also need unsecured credit, the trade-offs are covered on our page comparing personal loan rates, and the short-term option between a sale and a purchase is set out under bridging loans.
For anyone already holding a bank package, the practical consequence is different. A two-year fixed signed in 2024 was priced off a much higher curve, so repricing at maturity now works in your favour rather than against it — the opposite of the situation most borrowers were bracing for. Check the exact expiry date of your lock-in and start comparing about three months before it, because the reversion rate a bank applies after the teaser ends is rarely competitive with what it advertises to new customers.
And for anyone weighing the HDB route on a first flat, the arithmetic in this article is only half the decision. The other half is that the 5% cash downpayment a bank requires has to exist in cash, today, in addition to CPF savings. Households that clear the TDSR and MSR tests comfortably but are short of liquid cash often find the HDB loan is not the expensive option but the only available one.