What replaced SIBOR as the home-loan benchmark rate?

SORA, the Singapore Overnight Rate Average, published by MAS. SOR was discontinued after 30 Jun 2023 and SIBOR after 31 Dec 2024, so floating-rate packages are now pegged to compounded SORA plus a bank spread, or to the bank's own board or fixed-deposit-linked rates.

What's the difference between refinancing and repricing?

Repricing switches to a new package with the same bank, so the facility and mortgage stay in place. Refinancing moves the loan to another bank, with a new valuation and conveyancing, and may trigger the old bank's prepayment penalty if the loan is still in its lock-in, plus a clawback of any legal subsidy.

Can I switch from a bank loan back to an HDB loan?

No. An HDB loan may be refinanced with a bank, but a bank loan cannot be refinanced to an HDB loan (hdb.gov.sg, Housing Loan from Financial Institutions, read 1 Oct 2026). Leaving the HDB loan gives up the concessionary rate of 0.1% above the CPF OA rate for good.

How long can an HDB loan run?

The shortest of 25 years, 65 minus the applicants' average age, and the flat's remaining lease minus 20 years. A bank loan for an HDB flat can run up to 30 years, and up to 35 years for other property (MAS).

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Paper 2 · Property Finance & Financial Calculations · 9 min read

Home Loan Rate Types & Refinancing (fixed, floating, SORA)

Practise this section (223 questions) → · 4.8 Property finance and financial calculations, in sets of about 30

Must-know for the exam

The HDB concessionary loan is priced 0.1% above the CPF OA rate (2.6% while the OA rate is at its 2.5% floor), revised quarterly.
Both HDB and first bank loans lend up to 75% (HDB's cut from 80% on 20 Aug 2024), but only the bank loan needs 5% in cash.
HDB loan tenure is the shortest of 25 years, 65 minus average age, and remaining lease minus 20; bank loans run up to 30 years for HDB flats.
HDB loans need an SC applicant and income up to $16,000 (families), $24,000 (extended) or $8,000 (singles); a household may take at most two.
The switch is one way: an HDB loan may be refinanced with a bank, but a bank loan cannot be refinanced to an HDB loan (hdb.gov.sg).
SORA replaced SOR (discontinued after 30 Jun 2023) and SIBOR (after 31 Dec 2024); compounded SORA is backward-looking and transaction-based.
A fixed rate reverts to floating after its period; the lock-in is a separate term, and the prepayment penalty follows the lock-in, not the fixed period.
MAS sets no LTV limit on refinancing; tenure is capped at 30 years (HDB) or 35 years minus the years since the first loan was disbursed.
Refinancing an owner-occupied home loan is exempt from TDSR and MSR; an investment loan above 55% needs a debt reduction plan of at least 3% within 3 years.
On monthly rest each payment cuts next month's interest; on annual rest repaid principal keeps attracting interest until the year ends. Compare packages on EIR.

On this page · 4 sections

LTV, TDSR and MSR decide how much a buyer may borrow. This lesson covers the other half of the finance syllabus: which loan — an HDB concessionary loan or a bank loan — what the rate is pegged to, how interest is charged, and what it costs to switch. Examiners test the one-way door between HDB and bank loans, the SORA transition, and the difference between a lock-in and a fixed-rate period.

HDB concessionary loan vs bank loan

	HDB concessionary loan	Bank loan for an HDB flat
Interest rate	0.1% above the CPF Ordinary Account rate, reviewed quarterly (2.6% while the OA rate is at its 2.5% floor)	Market rate: fixed, SORA-pegged or board rate
LTV	75% of the lower of price or value (cut from 80% for applications from 20 Aug 2024)	75% of the lower of price or value
Minimum cash	None — the 25% may come wholly from CPF	5% of the lower of price or value
Longest tenure	Shortest of 25 years, 65 minus the applicants' average age, and the remaining lease minus 20 years	30 years; a tenure over 25 years, or a loan running past age 65, cuts the first-loan LTV from 75% to 55% and raises the cash minimum to 10% (MAS, LTV limits for options from 6 Jul 2018)
Who qualifies	At least one SC applicant; income up to $16,000 (families), $24,000 (extended families), $8,000 (singles); no private property now or in the last 30 months; at most two HDB loans ever	Any borrower who passes the bank's credit assessment
Affordability test	Instalment up to 30% of income; loan sized at a 3% interest-rate floor	MSR of 30% and TDSR of 55%, sized at MAS's 4% floor
Switching	May refinance to a bank	Cannot refinance to an HDB loan

Sources: hdb.gov.sg, Housing Loan from HDB and Housing Loan from Financial Institutions (read 1 Oct 2026); MAS, Rules for New Housing Loans (LTV for options from 6 Jul 2018).

CPF goes in first on an HDB loan. Buyers must use their CPF OA savings for the purchase but may each keep up to $20,000 in the OA; the loan covers the balance up to the 75% cap.
A second HDB loan comes after the old flat's proceeds. The household must put the full CPF refund and up to 50% of the cash proceeds from the flat (or private property) it last disposed of into the new purchase, keeping generally the higher of $25,000 or 50% of the cash. Buying before selling means a commercial rate until the old flat is sold within 6 months and the proceeds are applied.
Why the door is one-way. Moving from HDB to a bank gives up the concessionary rate permanently. It makes sense only if the bank's rate stays below OA + 0.1% for long enough to matter, which a salesperson should never promise.

Fixed, floating and the SORA transition

Fixed rate — locked for a set period, commonly 2–3 years, after which the loan reverts to the floating rate in the facility letter. It buys certainty, usually at a slightly higher starting rate.
Floating rate — a reference rate plus a spread fixed by the bank, which may step up after a set period. The rate resets at the intervals in the contract; with the tenure unchanged, a rise in the benchmark raises the instalment.
SORA (Singapore Overnight Rate Average) is the volume-weighted average rate of unsecured overnight interbank SGD borrowing, published by MAS. Home loans use compounded SORA over one, three or six months, which is backward-looking and transaction-based.
SOR and SIBOR are gone. SOR was discontinued after 30 Jun 2023 and SIBOR after 31 Dec 2024 (MAS, Interest Rate Benchmarks Transition, read 1 Oct 2026). SIBOR was forward-looking, polled from banks' quotes. Legacy loans were converted to SORA with an adjustment spread.
Board rates and fixed-deposit-linked rates — set by the bank itself; less transparent than a SORA package because the bank can move the reference.

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What interest rate does an HDB concessionary loan charge?Show answer
0.1% above the CPF Ordinary Account rate, reviewed quarterly, which is 2.6% while the OA rate is at its 2.5% floor.
Can a borrower refinance from a bank loan back to an HDB loan?Show answer
No. The switch is one-way: an HDB loan may be refinanced with a bank, but a bank loan cannot be refinanced to an HDB loan, so the concessionary rate is given up for good.
A package has a 2-year fixed rate and a 3-year lock-in. Is there a penalty for redeeming in year 3?Show answer
Yes. The penalty follows the lock-in, not the fixed-rate period. The fixed rate sets the price of the loan; the lock-in sets the cost of leaving.
When were SOR and SIBOR discontinued, and how does compounded SORA differ from SIBOR?Show answer
SOR after 30 Jun 2023, SIBOR after 31 Dec 2024. Compounded SORA is backward-looking and built from actual overnight interbank transactions; SIBOR was forward-looking and polled from banks' quotes.
What is the longest tenure for an HDB concessionary loan?Show answer
The shortest of 25 years, 65 minus the applicants' average age, and the flat's remaining lease minus 20 years.

Common questions

What replaced SIBOR as the home-loan benchmark rate?: SORA, the Singapore Overnight Rate Average, published by MAS. SOR was discontinued after 30 Jun 2023 and SIBOR after 31 Dec 2024, so floating-rate packages are now pegged to compounded SORA plus a bank spread, or to the bank's own board or fixed-deposit-linked rates.
What's the difference between refinancing and repricing?: Repricing switches to a new package with the same bank, so the facility and mortgage stay in place. Refinancing moves the loan to another bank, with a new valuation and conveyancing, and may trigger the old bank's prepayment penalty if the loan is still in its lock-in, plus a clawback of any legal subsidy.
Can I switch from a bank loan back to an HDB loan?: No. An HDB loan may be refinanced with a bank, but a bank loan cannot be refinanced to an HDB loan (hdb.gov.sg, Housing Loan from Financial Institutions, read 1 Oct 2026). Leaving the HDB loan gives up the concessionary rate of 0.1% above the CPF OA rate for good.
How long can an HDB loan run?: The shortest of 25 years, 65 minus the applicants' average age, and the flat's remaining lease minus 20 years. A bank loan for an HDB flat can run up to 30 years, and up to 35 years for other property (MAS).

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Study material aligned to the public CEA syllabus. Not financial or legal advice — verify current figures with the relevant authority (IRAS, HDB, CEA, MAS).