After nearly three years of elevated borrowing costs, Singapore’s homeowners are finally breathing easier.
As interest rates fall to new lows — and banks roll out highly competitive refinancing packages — many HDB owners are seizing the opportunity to switch from HDB loans to bank loans.
The result? A new wave of refinancing activity across 2025, fuelled by fixed-rate deals below 1.8% and floating SORA rates dipping to their lowest since 2021.
📊 Infographic: Key Mortgage Market Trends
🏦 Interest Rate Overview
- HDB concessionary loan: 2.6% (unchanged)
- Bank loans (fixed/floating): 1.55%–1.8%, lowest in 3 years
- 3M SORA: 1.34% (as of Oct 30) — down from >3.6% in 2023
📈 Refinancing Surge
- OCBC: >60% increase in HDB owners switching to bank loans (Jan–Sept 2025 vs 2024)
- Refinancing wave mirrors 2019–2020 levels, when rates also fell below 1.5%
💸 Popular Bank Packages
- 2-year fixed: 1.48% with free conversion after 1st year
- 3-year fixed: 1.5% with no penalty for full repayment or sale
- POSB HDB Loan: 1.7% or lower → ~$3,600 savings on a $400K loan (first year)
🎁 Added Incentives
- Cash rebates 💵
- Legal fee subsidies ⚖️
- Free repricing options after first year 🔁
- Greater flexibility for switching or prepayment without penalty
- 🏘️ Homeowner Insights
- 9 in 10 refinancers prefer fixed-rate loans for repayment certainty
- Strongest activity among HDB owners ending lock-in periods from 2022–2023 packages
- Some private homeowners selling and re-buying instead of refinancing
🔮 Market Outlook
- 3M SORA expected to hover 1.3–1.4% by year-end 2025
- Refinancing momentum to continue into 2026 before moderating mid-year
- HDB-to-bank refinancing expected to stay steady
💬 Commentary
This trend reflects a growing sophistication among Singapore homeowners.
Rather than sticking with the familiar 2.6% HDB loan, more are strategically leveraging falling rates and competitive bank offers to lower their monthly repayments and boost long-term savings.
However, refinancing is not a one-size-fits-all decision.
Once a homeowner switches to a bank loan, there’s no turning back to HDB’s concessionary rate. As such, it’s crucial to weigh rate trends, lock-in terms, flexibility, and future plans before making the move.
The key takeaway: in a softening interest rate environment, liquidity and flexibility matter as much as the headline rate.
✅ Summary Highlights
✅ Mortgage rates now between 1.55% and 1.8%, lowest in 3 years
✅ 3M SORA at 1.34%, down from over 3.6% in 2023
✅ OCBC reports >60% surge in HDB-to-bank loan refinancing
✅ 9 in 10 refinancers prefer fixed-rate certainty
✅ Banks offer cash rebates, legal subsidies & free conversion
✅ Refinancing wave expected to extend into 2026, then stabilise mid-year
If you’re an HDB homeowner wondering whether refinancing makes sense for you, let’s review your current package and assess your savings potential — before the next rate cycle turns.