Home Loans for HDB Properties
Deciding to apply for a Housing Development Board or HDB loan, needs careful consideration before making the final decision. As HDB loans allow you to acquire property in Singapore at concessionary rates, the eligibility criteria and requirements are quite stringent, and not open to everyone.
HDB loans are not available to non-Singaporeans. Also, these home loans are only issued to buyers that are purchasing HDB flats and not condos or other private homes. Each loan amount comes with differing interest rates, terms, the margin of financing, loan tenures, and refinancing costs, among other features.
With an HDB Home Loan:
- You can use your property as collateral for the loan
- You get the loan after the down payment is made when you have paid the remaining purchase price to the seller
- Interest is charged from the first disbursement
Why choose to get your HDB home loan with Mortgage Simple?
We Offer Both Types of HDB Home Loans
At Mortgage Simple we are here to guide you get the best HDB Home loan to suit your circumstances. We offer brokerage and advisory services for:
Fixed-rate HDB Home Loans
Some of our partners, like DBS and Citibank, offer fixed-rate home loans.
These loans are available for people seeking to buy HBD properties in the resale category. The loans come with a lower interest rate compared to other fixed housing loans – typically 15% to 20% cheaper.
Good to note is that these home loans remain fixed for a period of up to 5 years, after which they translate to floating rates. So, it is the right choice if you’d rather not deal with an interest rate increase in the next few years.
Again, due to the aspect of the lock-in period, fixed-rate home loans do not have the refinancing option for the tenure of the loan.
Floating-Rate HDB Home Loans
Floating-rate HDB Home Loans, have interest rates that fluctuate in line with the prevailing market rates.
There are no fixed rates or lock-in periods, allowing you to get the most competitive prices that can save you up to 30% on your total mortgage repayment. Some of our partners with the best floating rates are DBS and Citibank. Our mortgage specialists will work with you to ensure that you land the best rates.
Notably, floating-rate loans depend on SIBOR, the board that determines mortgage interest rates in Singapore, and SOR, the rate of exchange between US dollar and the Singapore dollar, or the bank fixed deposit rate.
You have high chances of saving a considerable amount with a floating-rate loan than with a fixed rate home loan.
Nonetheless, the frequent and unpredictable changes in mortgage rates can be a worry. If this is the case, you could consider a fixed-rate loan for some time to help plan your loan costs within the lock-in period.
Now, you understand more about HDB home loans what are the requirements to get one?
The applicant must be 21 years old or older to qualify
The applicant’s family monthly income must not exceed S$14,000 if they are an individual and S$21,000 for extended families
The minimum loan application amount is S$100,000
All applicants must show the following documents when making their application:
- Photocopy of NRIC or passport for all applicants and owners
- Last 12 months loan statements from an existing bank or financial institution – (for refinancing)
- Option to purchase or sale and purchase agreement (for new property purchases)
- Latest CPF withdrawal statement for existing property to be sold or refinanced
- Tenancy agreement (if applicable)
- Evidence of sale of existing property (if applicable)
- Latest Tax Assessment and CPF Statement (for salaried employees)
- 2 Years Income Tax Assessment (for self-employed applicants who have been at their current business for at least two years)
- Applicant must sell any private residential property they own more than 30 months before the loan application
- Applicants are only eligible for 2 HDB Home loans in lifetime
- At least one applicant must be a Singaporean citizen or resident
- HDB loans only apply to the purchase of HDB flats
- The tenure of the HDB loan must not exceed 25 years, or till you turn 65, whichever is sooner
- Monthly repayment cannot exceed 30% of your monthly income
The most common method of calculating interest on an HDB Home Loan is monthly reducing. This method means that a small increase in interest rates can affect the amount you have to pay in mortgage repayments monthly. These increases, in turn, have an impact on the total loan repayment, and we will help you to keep track to understand how your loan portfolio is performing.
If you have queries or need further assistance, please do reach out to our team and we will be happy to answer your questions.