When buying your first HDB flat in Singapore, you have all the reasons to take a HDB home loan. You can get up to 80% of the property’s value, unlike a bank loan of up to 75%.

However, as time passes, you can consider getting a mortgage at a lower interest to refinance your HDB loan. If you are thinking of this option, you should know how to refinance HDB loan.

Keep scrolling down to learn how to switch from a HDB loan to a bank loan, the eligibility criteria, how long it takes, and what to consider.

Switching From HDB Loan To Bank Loan

The increase in interest rates in the property industry has become the news headline in Singapore. The rates are set to go higher this year, thus affecting your current HDB loan.

But you don’t have to wait for the rates to hike and pay higher interest; instead, you can refinance your HDB loan.

Refinancing means getting a home loan with advantageous loan terms. For example, you can find a loan with a lower interest rate.

The refinancing journey requires you to look for various loan offers from different banks and compare them. After getting the best deal, you get into the legal process.

Even though it can be a bit tedious, it is worth refinancing your home loan in Singapore- you will save on interest.

It is important to note that after refinancing your HDB loan to a bank loan, you cannot go back to a HDB loan.

Eligibility Requirements

Before learning how to refinance HDB loan, check your eligibility.

Here is what lenders consider when you want to refinance a home loan:

Mortgage Servicing Ratio (MSR)

MSR is the portion of your gross monthly income you can use to service all your property loans.

You can only use up to 30% of your gross monthly income to repay all your mortgages, including the one you are applying for.

Total Debt Servicing Ratio (TDSR)

TDSR is the percentage of your gross monthly salary that you can use to repay all your loans, including the home and the refinancing ones. In Singapore, the TDSR is capped at 55%.

This means you can only use up to 55% of your gross monthly salary to pay all your monthly installments.

Loan-to-Value (LTV)

The LTV limit will also determine if you can take a mortgage for refinancing. You can get a loan of up to 75% of the property’s value from a bank.

Therefore, you need to have paid the remaining 25% of the property’s purchase price or valuation, whichever is lower, with your cash at hand or CPF.

You can still get a refinancing loan if you haven’t covered this amount. However, a bank will only allow you to take up to 75% loan.

Additional Eligibility Requirements

Lastly, you need to meet the bank’s requirements to get a refinancing home loan in Singapore. For example, a bank will require you to earn a certain amount depending on the loan amount.

Why You Should Refinance HDB Loan

You may be wondering why you need to get a home loan to refinance your HDB loan. Here are some of the benefits:

Banks Offer Lower Interest Rates

HDB loan refinance rate has been at 2.6% for more than 10 years, which is a stable interest rate for homeowners like you.

Even though you can enjoy the stability, you can find banks offering a lower interest rate for a HDB refinancing loan. Usually, you can get rates as low as below 2%.

The difference may seem small, but it can make a massive difference over the years. It lowers the total interest you will pay.

Refinancing Home Loan Perks, Promotions, And Incentives

You can enjoy incentives on top of the low interest when switching from a HDB loan to a bank loan. Banks provide such offers to help you minimise the cost of refinancing.

For example, you can get perks to help you cater to the legal and valuation fees.

How To Refinance HDB Loan To Bank Loan

Here are the steps on how to refinance HDB loan to a bank loan in Singapore:

Compare The Available Loan Packages And Their Rates

You should compare the available offers in the market if you want the best deal to refinance your home loan. You can find out what several banks have to offer and compare their interest rates.

This will help you find a loan at the lowest interest rates. Also, look into the incentives and perks offered.

Prepare The Required Documents

When you want a mortgage for refinancing your HDB loan, there are documents that you need to provide to your preferred bank. They include:

  • Your NRIC or passport
  • Details of your HDB flat. You can find them at the MyHDBPage
  • Financial information of your HDB flat, which is also available at the MyHDBPage
  • Your latest outstanding loan statement. You can obtain it from the MyHDBPage
  • Your latest Central Provident Fund (CPF) Property Withdrawal Statement. You can get it from your CPF account
  • Your latest Notice of Assessment from the Inland Revenue Authority of Singapore. It is available on the IRAS MyTax Portal
  • Your payslips for the last three months
  • Your CPF transaction history for the last 12 months. You can get it from the CPF account
  • Your employment contract. This applies if you are less than three months into employment
  • Tenancy Agreement and Stamp Certificate if you have rental income

Assessment Of Your Property’s Value

A bank will have to assess the value of your property before approving your HDB refinancing loan. The bank can do it, or a professional surveyor.

Engage A Law Firm

Refinancing a home loan in Singapore involves a lot of work. Therefore, consider choosing a law firm to help you with the complex work. For example, it can help you to manage the paperwork and remind you when to sign the necessary documents. Most firms charge about $1,500.

Adjust Your CPF Contribution

You can use your CPF savings to pay your monthly installments. If this is the case, you need to adjust the amount you will be paying on your CPF account. Your law firm can assist you with this.

How Long Does Refinancing HDB Loan Take?

The home loan refinance process may look complicated. As a result, you may think it will take months for the bank to process your application.

However, a bank can switch your HDB loan to a bank loan within a month.

The law firm that you hire makes the process easier and faster. It helps you with the paperwork that seems tedious.

Also, considering the amount you will save after a successful HDB loan refinancing, it is worth sacrificing your time.

What To Take Note Of

At this point, you know how you can refinance your HDB loan to a bank loan, and you have probably made up your mind to start the process.

Before then, there are a few things that you need to take note of. They include:

Interest Reset Dates

If you take a loan with a floating interest rate, the interest reset date can affect it.

For example, a bank can state that you can only redeem your loan on specific dates, such as on the reset date of your loan. You may incur a penalty of about 0.5% to 2% of the loan amount if you don’t redeem it.

Reference Rate

Banks provided different fixed, floating, and internal board rates for a HDB refinancing loan. Hence, look into these rates before you submit your loan application.

Cancellation Fees

What happens if you choose to cancel the loan before disbursement? Banks will charge a cancellation fee for this action.

It applies if you cancel a loan between the time you accept the loan offer or sign the contract and the day the loan should be disbursed. The fee ranges between 0.5-2% of your cancelled loan amount.

Processing Or Admin Fee

You can be charged a processing fee if you are dealing with commercial or industrial property. It can cost you hundreds to a few thousand dollars in Singapore.


When considering how to refinance an HDB loan, take note of the subsidies a bank offers. Banks provide them to help you lower the refinancing cost.

You can enjoy subsidies for legal and valuation fees or a premium for free fire insurance.

Pricing Structure

Which pricing structure does a bank use when you take a refinancing HDB loan? It can use a step-up, flat, or step-down structure.

The step-up system means a loan will become more expensive with time, while step-down means it will get cheaper.

Steps For Refinancing A HDB loan

Are you thinking of how to refinance HDB loan in Singapore? This is a good idea because it helps you to save on the total interest you can pay for your home loan.

First, you need to compare the available loan packages and their rates to refinance your HDB loan to a bank loan at the lowest rate.

After getting the best deal, you should prepare the required documents and then allow an assessment of your property’s value.

From here, you can choose a law firm to help you with the paperwork and other processes.

Lastly, if you will be using your CPF savings to pay the monthly installments, adjust the amount to be deducted.

If you follow these steps and meet the eligibility requirements, you can get a mortgage refinancing loan.

You can get a home loan to refinance your HDB loan from a licensed money lender such as Credit 21. We are a financial institution operating under the Ministry of Law.

All you need is to apply for a loan or contact us without fear because our loan terms are reasonable.