How To Refinance A HDB Loan In Singapore

Personal Finance

How To Refinance A HDB Loan In Singapore

March 7, 2023

Most people choose to take up an HDB housing loan to buy an HDB flat. The main reason for this is that you can get up to 80% of the purchase price of the HDB flat from HDB.

However, the interest rate for HDB housing loans is usually slightly higher than those of bank loans and there are usually some restrictions on how you can use the loan funds. Furthermore, with the continuous increase in interest rates of HDB loans in recent years, many people eventually choose to refinance HDB loan to bank loan.

For refinancing home loan Singapore offers, a clear understanding of the eligibility requirements, how to refinance HDB loan and what to take note of is key.

Switching From HDB Loan To Bank Loan

HDB loans tend to be attractive at first glance. Of course, they do come with good loan amount and other features.

The interest might also have been lesser than bank rates at the time of applying for an HDB loan. But, over time, the interest rates have increased significantly and this has prompted many homeowners to refinance HDB loan to bank loan.

This means you could save a significant amount in interest payments over time if you switch from HDB loan to bank loan.

Furthermore, refinancing your HDB loan with a bank can give you access to more loan features like additional loan amounts and extended repayment periods.

Eligibility Requirements 

For switching from HDB loan to bank loan, you need to meet the eligibility requirements of a bank loan.

To get a better understanding of these requirements, there are a few factors to consider.

Maximum Servicing Ratio (MSR)

MSR is the percentage of your gross income that can be set aside for loan repayments. MSR cannot exceed 60%.

Total Debt Servicing Ratio (TDSR)

This is the maximum percentage of your gross income that can be set aside for loan repayments and other debt obligations. TDSR normally cannot exceed 55% of your gross income.

Loan To Value (LTV)

The LTV ratio refers to how much you can borrow from a bank based on your loan amount. Typically, the maximum LTV ratio for experienced borrowers is 75% but it can be lower if you are a first-time borrower or have additional debt obligations.

Income Status

Your income must be proven with relevant documents and you must have a satisfactory credit record. The minimum income requirement may depend on the bank you are applying for and the amount you want for refinancing HDB loan.

Depending on these factors and how much you already owe on your HDB Loan, the bank may or may not approve a refinance of HDB loan to bank loan.

Why You Should Refinance HDB Loan

If you qualify for HDB refinancing Loan with a bank, there are several benefits that come with it.

Good Interest Rate

A major benefit of refinancing HDB loan to bank loan is that you can get a lower interest rate than with an HDB loan. This means you will be paying lesser interest on the total amount borrowed and thus lower monthly repayments.

With a lower interest rate and lower monthly repayments, you can save more money in the long run.

More Flexibility

Another advantage when you refinance home loan is that you will have more control over how you use the funds. For instance, if you need to make renovations or repairs to your home, banks are usually more willing than HDB to grant higher refinance loans so you can use the extra funds.

Bank Incentives

Banks typically offer attractive incentives to refinance HDB loan. These could include cash rebates and other promotional offers like discounts on the processing fees.

Banks also offer subsidies for refinancing HDB loans which can reduce the amount of interest you have to pay.

How To Refinance HDB Loan To Bank Loan

The process of switching from HDB loan to bank loan is quite simple. Here are the steps you need to take.

Check Your Eligibility For Refinancing Home Loan

The first step is to check your eligibility for a bank loan. As mentioned above, you need to take into consideration the MSR, TDSR and LTV when refinancing HDB loan.

Only then you can approach a bank for refinancing home loan. Without proper eligibility, you are unlikely to receive approval from the bank.

Compare Loan Packages

Once you have been approved for refinance HDB loan, the next step is to compare different loan packages from various banks. This will help you identify the most suitable package that meets your needs and budget.

Without proper comparison, you may end up with a higher interest rate or additional hidden fees.

Many banks also offer cash rebates and other promotional offers when switching from HDB loan to bank loan, so be sure to take advantage of these.

Submit Complete Documents

When applying for HDB loan refinancing, make sure all the necessary documents are submitted to the bank in order for your application to be approved. This includes

  • NRIC
  • HDB Flat details
  • Financial information on HDB loan
  • Outstanding loan statements
  • Central Provident Fund (CPF) statementIncome proof documents
  • Recent Notice of Assessment from the Inland Revenue Authority of Singapore
  • Payslip copies for recent months
  • Other income details

Get Your Valuation Report

The bank will require a valuation report for the HDB flat. This helps them to determine how much they can lend you. A valuer will be appointed by the bank and will visit your house to inspect the condition of your flat.

Handle Legalities Of Refinancing HDB Loan

Once the loan amount is established, the bank will provide you with a Letter of Offer that includes all the details such as interest rate and repayment schedule. Make sure to read this document carefully and if everything is in order, sign and return it to the bank.

You can hire a lawyer to handle the legalities involved in the refinancing process. The lawyer will help you to understand your rights and obligations under the loan agreement.

CPF Contribution Adjustment

In case you use your CPF savings for HDB loan refinancing, you have to adjust the amount of contribution to your CPF account. This is done by submitting a form at the CPF Board website and informing the bank how much CPF money you are allowed to withdraw for the HDB loan refinancing.

How Long Does Refinancing HDB Loan Take?

The entire refinancing HDB loan process typically takes about four to six weeks, depending on how quickly you submit the documents and how soon the bank processes them.

While the process may seem like a long-term commitment, it is important to understand that this is a one-time process and will help you save money in the long run.

What To Take Note Of

Before refinancing HDB loan, it is important for you to understand how much you can afford to borrow and how long you will need to repay the loan.

Just after you have compared the rates of various banks, you might have been finally ready to sign the agreement and switch from HDB loan to bank loan. However, there are certain things you must note before signing the agreement.

Lock-in Period

Lock-in Period is nothing but the tenure you have to stick to the loan package you have chosen. Banks typically offer a lock-in period of one to three years and during this time, you are not allowed to refinance or switch lenders.

If by any chance, you decide to break the agreement, there may be serious consequences like additional charges for early repayment.

It is important to read the terms and conditions of the loan agreement carefully before signing.

Compare Banks’ Repayment Schedules

When refinancing HDB loan, it is also important to consider how much you need to pay each month. Banks usually offer different repayment schedules such as monthly installments or bi-monthly installments.

Compare the different repayment schedules offered by banks and see which one fits your budget better.

Pre-payment Penalties

This is a charge that banks impose when you make a loan repayment before the due date or if you pay off the entire amount before the end of the loan tenure.

The amount for pre-payment penalties varies from bank to bank, so make sure to read the loan agreement carefully and understand how much this charge is.

Conversion fees

Banks may charge a conversion fee when you refinance HDB loan. This covers administrative costs incurred in the process of refinancing and converting your existing HDB loan to bank loan.

It is important to understand what this fee covers and how much it will cost before signing the agreement.

Admin Fees

Administrative fees are typically charged by banks for processing your HDB loan refinancing application. It is important to understand how much this fee will be before you sign the agreement.


HDB loans come with interest subsidies such as the Special CPF Housing Grant and the Additional CPF Housing Grant. If you are eligible for these subsidies, make sure to check how much of these grants can be transferred over to your bank loan.

Interest Reset Dates

Most banks offer fixed-rate loans with interest reset dates. This means that the interest rate on your loan may change after a certain period of time.

It is important to understand how much the interest rate can change and how often this will happen before signing the agreement.

Get The Best Refinancing HDB Loan Now

If you have been wondering, ‘How to refinance HDB loan?’, this guide should have answered your questions.

Remember to compare the various offers from different banks before signing on the loan agreement. Make sure to read all of the terms and conditions carefully in order to get the best refinancing HDB loan for your needs.

Credit Thirty3 can help you get the right HDB refinancing loan at the best rates.

Contact us now or Apply for a loan at our website today to get started.