When it comes to buying a home in Singapore, many buyers still ask: Does HDB approve a higher loan amount than banks?

Short answer:

Yes and it’s mainly because HDB uses a less stringent stress test compared to banks. However, both now share the same Loan-to-Value (LTV) limit of 75%, so the difference comes from how affordability is calculated, not from the percentage alone.

At Fairloan, we’ll explain why this difference matters and how to decide which loan suits your financial goals best.

What Is a Stress Test — and Why Does It Matter?

A stress test is a financial assessment used to determine how much loan you can safely afford if interest rates rise in the future.

It’s not your actual rate, it’s a hypothetical higher rate applied during the loan assessment to ensure you can handle future fluctuations.

Here’s how it works:

• Banks in Singapore must test affordability at 4% (or the actual interest rate + 2%, whichever is higher).
  
  
• HDB, however, uses a lower internal stress test, typically around 3% or less.
  
  

Because the stress rate is lower, HDB loans often result in a higher approved loan amount, even though both lenders cap at 75% LTV.

LTV (Loan-to-value): Both HDB and Banks Now at 75%

Previously, HDB allowed up to 80% LTV. But since September 2022, both HDB and banks are capped at 75% of your property price or valuation, whichever is lower.

So technically, the maximum percentage you can borrow is now the same,  but the stress test difference means HDB may still approve a slightly larger amount for the same income level.

Downpayment: CPF vs Cash

One of the key advantages of an HDB loan is flexibility in your downpayment.

This difference makes HDB loans especially useful for buyers with limited cash savings but healthy CPF balances.

Interest Rate Comparison: Stability vs Market Fluctuations

HDB loans are pegged at 0.1% above the CPF Ordinary Account rate, which has been 2.5% for over 20 years, giving you a consistent 2.6% interest rate.

(Read here for more info on why HDB loan is always at 2.6%)

That means your monthly instalment remains stable and predictable.

In contrast, bank loan rates fluctuate with market conditions (usually pegged to SORA or fixed for a few years).

Here’s a snapshot of current (Nov 2025) rates:

So while HDB loans provide certainty, bank loans currently offer lower rates, especially for the next 2–3 years as interest rates trend down following US Fed cuts.

Who Cannot Take an HDB Loan

Even though HDB’s stress test allows higher approval amounts, not everyone qualifies for an HDB loan.

You cannot take an HDB loan if:

• You are a PR + PR couple (only SC or SC+PR eligible)
  
  
• You’ve taken two or more HDB loans previously
  
  
• Your household income exceeds the HDB ceiling ($14,000 for families, $7,000 for singles)
  
  
• You’ve owned or sold private property within 30 months
  
  

In such cases, a bank loan is your only financing route, which Fairloan can help you secure at the lowest rate available.

Fairloan’s View: Rate Is Just One Part of the Equation

At Fairloan, we don’t just “sell you the lowest rate.”

We analyse your full financial profile, income, CPF balance, property type, risk tolerance, and future plans before advising which loan fits you best.

(A) If you need maximum stability, an HDB loan at 2.6% offers peace of mind.

(B) If you want to optimise savings during this low-rate window, a bank loan at 1.50-1.78% fixed may save thousands in the next few years.

Ultimately, every homeowner’s situation is different, and that’s why we compare across all major banks (DBS, OCBC, UOB, Maybank, HSBC, CIMB) to find the perfect match for you.

Fairloan Verdict

So, does HDB approve a higher loan amount than banks?

Yes, generally due to its lower stress test rate.

However, both lenders now share the same 75% LTV cap, so the real difference lies in eligibility, flexibility, and rate structure.

At Fairloan, we’ll help you assess both sides carefully, ensuring your loan choice matches your financial goals, not just the headline rate.