Do it yourself, in three steps
What will my bank loan cost?
Answer three short questions. You get the instalment you pay now, the instalment you pay after the fixed period ends, and the total interest across the whole loan.
The four numbers that decide everything
Three things that catch people out
- The rate expires
You are quoted a rate for two or three years, not for the loan. After that it reprices to SORA plus a spread — and the spread is the number you carry for the next twenty years.
- Repricing recalculates
The bank rebuilds the instalment over the tenure still left, so a rate moving from 2.65% to 3.4% does not raise your payment by the same proportion.
- The lock-in is the commitment
If you might sell or refinance within two years, a slightly worse rate with no lock-in is often the cheaper package.
Budget for the second number, not the first. The instalment after the fixed period is the one you live with for most of the loan. If that figure is uncomfortable, the package is too expensive — however good the teaser looks.
Common questions
What is SORA?
The Singapore Overnight Rate Average, published by MAS. Most floating packages are priced as SORA plus a fixed spread, so your rate moves with SORA but the spread stays put for the life of the loan.
Can I use CPF for a bank loan?
Yes, for the instalment and for part of the downpayment. But at least 5% of the price must be cash if this is your only housing loan, and 25% if it is not.
What is the longest tenure?
Thirty-five years for private property, thirty for an HDB flat on a bank loan. Going past thirty years, or past age sixty-five, cuts how much you can borrow.
Is a bank loan cheaper than an HDB loan?
Usually for the first few years, rarely for all of them. The HDB rate barely moves; a bank rate can. Our fixed-versus-floating page lets you test where the crossover sits.
Can I repay early?
Inside the lock-in, expect a penalty of about 1.5% of what you redeem. Most packages allow partial prepayment of a set percentage each year without charge — ask for that clause in writing.