{"id":91873,"date":"2025-11-03T16:25:33","date_gmt":"2025-11-03T08:25:33","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=91873"},"modified":"2025-11-21T16:56:15","modified_gmt":"2025-11-21T08:56:15","slug":"hdb-refinancing-to-bank-loans-oct-2025","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/hdb-refinancing-to-bank-loans-oct-2025\/","title":{"rendered":"More HDB flat owners refinancing to bank loans as rates hit 3-year low"},"content":{"rendered":"
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With home loan rates dropping to their lowest point in three years, more HDB flat owners are making the switch to cheaper bank loans. The recent fall in interest rates, coupled with aggressive competition among local banks, has driven a noticeable rise in mortgage refinancing activity since the start of 2025.<\/p>\n\n\n\n

Bank loan rates fall below 2%<\/h2>\n\n\n\n

As reported by The Straits Times<\/a>, the trend has gained momentum as bank rates continue to fall below the HDB concessionary rate of 2.6%. According to Redbrick Mortgage Advisory associate director Clive Chng, both fixed- and floating-rate bank loan packages have dropped to between 1.55% and 1.8%<\/strong> over the past six months. <\/p>\n\n\n\n

This drop has encouraged many HDB flat owners who took up higher-rate loans in 2022 and 2023 to refinance now that their lock-in periods have ended. Floating-rate packages, typically pegged to the three-month compounded Singapore Overnight Rate Average<\/a> (SORA), have become especially attractive.<\/p>\n\n\n\n

The three-month SORA, which stayed above 3.6% for most of 2023, has now fallen to around 1.34%<\/strong> as of 30 October \u2014 the lowest in more than three years. Analysts say rates could edge lower if the US Federal Reserve continues to ease monetary policy, Singapore\u2019s inflation stays contained, and the Singapore dollar remains strong.<\/p>\n\n\n\n

Refinancing momentum builds in 2025<\/h2>\n\n\n\n

Local banks have confirmed that refinancing activity has picked up sharply, particularly among HDB flat owners. Before this, the last major refinancing wave occurred between 2019 and 2020, when floating rates fell below 1.5%, leading to a 35% to 40% year-on-year jump in refinancing volumes from HDB to bank loans. <\/p>\n\n\n\n

A similar wave appears to be forming in 2025. OCBC Bank reported that the number of HDB homeowners switching from HDB loans to OCBC home loans grew by more than 60% in the first nine months of the year compared with the same period in 2024. <\/p>\n\n\n\n

OCBC\u2019s head of home loans, Maryanne Phua, noted that most borrowers preferred fixed-rate options, with nearly nine in ten HDB owners who refinanced choosing them for more predictable monthly repayments.<\/p>\n\n\n\n

At DBS Bank, head of deposits and secured lending, Chelsea Ling, also observed higher demand for the POSB HDB home loan, though exact figures were not disclosed. The bank\u2019s three-year fixed-rate loan package offers rates of 1.7% or lower, with no penalty for early repayment or property sale during the lock-in period.<\/p>\n\n\n\n

Ms Ling noted that switching from an HDB loan to the POSB HDB home loan could translate to around S$3,600 in first-year savings on a S$400,000 loan \u2014 “enough to cover a round-trip flight from Singapore to Tokyo for a family of three\u201d.<\/p>\n\n\n\n