POSB HDB Home Loan

POSB HDB Home Loan Review: Best for Capped Floating-Rate HDB Home Loan Borrowers

POSB offers five-year interest rate cap protections and does not levy any commitment and prepayment fees. Clients can also increase interest income by repaying mortgages through the bank’s Multiplier Account. Successful refinancing applicants can get a cash reward of S$2,000.

Yet, the interest rate protection is only applicable to five years. Borrowers may need to seek alternative sources after the period. Click here to find out more on the best home loans in Singapore. Besides, applicants have fewer options: fixed-rate and floating-rate packages. Last, only loan refinancing clients can get the cash reward. 

Key Features

POSB caps HDB home loan interest rates and eliminates additional payments. Besides, the bank offers generous incentives to clients refinancing HDB loans. POSB allows you to integrate your loan payments to other incentive plans to earn more interest benefits.

  • POSB caps the interest rates to a ceiling in the floating package so that borrowers can predict their maximum interest costs.
  • The bank does not charge a commitment fee or a prepayment fee.
  • POSB uses the Six-month Singapore Dollar Fixed Deposit rate(FHR6 for S$1,000 to S$9,999) by the DBS bank as its loan rate basis.
  • The current FHR6 is 0.2% per annum.
  • The interest rate cap for the first two-year floating rate package is a maximum of 2.3%.
  • Homeowners can convert their loan package one-time free sixty months after the first loan disbursement.
  • Enjoy S$2,000 cash reward if you refinance your HDB home loan with POSB for an amount of over S$250,000 or above.
  • You may save up to S$200 per month if you take up an HDB loan with POSB.
  • Combined with the Multiplier Account from the bank, the POSB’s HDB loan packages offer more interest income and benefits.


HDB Exclusive Packages Details

POSB offers three loan packages for new or refinancing HDB homebuyers. They are:

1. Five-year floating package

Year one FHR6+0.8% per annum
Year two to five FHR6+1% per annum
Year six and after that FHR6+1% per annum
Interest rate caps From 1st to 5th at a cap of 2.3% max.
Commitment fees, prepayment fees None
Minimum initial loan amount  S$100,000


2. Five-year fixed-rate(1.95% p.a.) package

Year one to five 1.95% per annum
Year six and after that FHR6+1.8%
Minimum initial loan amount  S$100,000
Loan conversion Once 30 months after the first loan disbursement, a homeowner can reprice an HDB loan at no cost.
Commitment fees, prepayment fees N/A


3. Five-year fixed-rate(1.65% p.a.) package

Year one to five 1.65% per annum
Year six and after that FHR6+1.6%
Minimum initial loan amount  S$200,000
Loan conversion Once 60 months after the first loan disbursement, a homeowner can reprice an HDB loan at no cost.
Commitment fees, prepayment fees N/A


POSB Multiplier Interest Account Saving

POSB encourages HDB loan clients to use the multiplier account to earn more interest, starting with loan payments. A multiplier account is an integrated account calculating a client’s fund balances and transaction activities. The aim is to earn more interest from increasing the fund balance and paying expenses, including the mortgage payments, through POSB.

The funds on your account earn more interest the more you deposit and handle your expenses through the bank.



  • Interest rate caps for the floating package protect mortgage payments from further increasing in a rate-increasing environment for up to five years. Homeowners can use the savings to earn more returns from deposits or investments.
  • What POSB distinguishes from other banks is they do not charge the prepayments and loan commitment costs. Clients have the flexibility of prepaying their loans and reducing the interest cost. It is easier to change a more competitive loan plan at no loan commitment cost.
  • You can use your loan repayment transactions to enhance your interest income through a multiplier account with POSB. The account integrates most of your transactions through the bank and accumulates the credits by activities. The bank converts the credits into higher interest income for your account.
  • You can get up to a cash reward of up to S$2,000 upon successful applications of at least a S$250,000 refinancing loan.
  • A free conversion can make repricing of your home at no charge.
  • Your savings and deposits from a multiplier account are still under the protection of the deposit insurance scheme in Singapore.


  • Interest rate caps apply to shorter-term till the fifth year. If the interest rates increase substantially after the period, borrowers may convert to other banks for financing their loan plans.
  • The minimum loan amount is S$100,000 or above; lower amount applicants cannot access the benefits. In addition, homebuyers for loans below S$200,000 have fewer options available for loans except for the first two packages: floating-rate and fixed-rate of 1.65% only.
  • The cash reward of S$2,000 is available to successful refinancing applicants only.


How Do POSB HDB Home Loans Compare To Other Banks?

Housing Development Board(HDB) also offers to finance qualified homebuyers, and the loan rate is a standard one of 2.6% per annum. Many banks in Singapore offer more competitive packages with extra benefits to applicants. The following are comparisons of the major banks providing the products in the market.

1. Fixed-rate home packages

Banks Lock-in periods First-year interest rates Sign-up promotions
POSB unspecified 1.95% & 1.65% per annum – One free loan conversion after thirty and sixty months of a loan disbursement

– A S$2,000 cash reward is available to refinancing applicants only.

DBS Two years & three years 1.3% & 1.4% One free conversion after twenty-four months of a loan disbursement
Citibank Two years & three years 1.23% & 1.25% Shopping vouchers available to successful applicants for a loan amount of S$800,000 or above
Maybank Two years 1.84% N/A
UOB Three years 1.86% A reward upon a successful online application


2. Floating rate packages

Banks Lock-in periods First-year interest rates Sign-up promotions
POSB unspecified FHR6+0.8% per annum The loan rate caps at a maximum of 2.3% per annum for five years.
DBS Two years FHR6+0.8% per annum(capped at 1.4% for the first year) N/A
Citibank Two years 3M SORA+0.97% per annum Shopping vouchers available to successful applicants of a loan amount of S$800,000 or above
Maybank One year 3M SORA+0.9% N/A
UOB Two years 3m SORA+1.2% N/A

Note: 1. The current DBS FHR6 is 0.2% per annum. 2. The current 3M SORA(Singapore Overnight Rate Average) is currently 0.14% per annum.


Home Loan

What We Think About POSB Home Loan Packages?

POSB protects clients’ interest payment risk and puts a ceiling in case of interest rate increases. The floating-rate loan borrowers can enjoy up to five-year interest rate upward protection while still benefiting from rate decreases brought by the floating rate mechanism.

Though the ceiling nature and duration are seldom available to other banks in the market, POSB’s fixed package is still more expensive than similar products by other banks. From the table above, we can see that one of the two fixed-rate products is the highest among the major players in the market. The lower-priced package from POSB is on the middle scale of the range offers.

Moreover, POSB uses the DBS FHR6 as their rate basis other than the three-month SORA general banks use regarding the floating-rate offers. But adding to the bank spread, we see POSB’s floating products are more competitive than banks, e.g., UOB, Maybank, and Citibank.

What puzzles us is the bank does not publish the lock-in periods for its products. Besides, it offers few incentives to sign up for loans. Environment-conscious clients may not see the appeal from the bank as it provides few promotions about the HDB products in trend.

We believe the bank’s floating-rate products are more appealing to pragmatic applicants preferring lower interest costs over too much fancy on the way.


How To Apply For POSB HDB Home Loan

Applicants should be 21 to 65. In addition, the minimum loan required is S$100,000 or S$200,000 for the fixed-rate(1.65 p.a.) package. The following steps are our guide:

Step 1: Get all information ready upon application. They are

  • filling up the loan application online or using a hard copy downloaded from the bank’s official website
  • the NRIC or Singpass information
  • the income proof(CPF statements, tax assessments, payroll slips)
  • the credit facility information
  • the HDB property information, for example, the option to purchase

Step 2: If the bank approves your application, the borrower must sign a letter of offer, an OTP, and related documents. Besides, a resale application(if it is a unit for resale) from the seller is also necessary.

Step 3: An HDB home buyer should pay necessary fees, for example, option fees, option exercise fees, to the seller.

Step 4: Schedule the time for signing the purchase agreement.

Step 5: Schedule the time to sign contracts of an HDB unit transfer and payment of legal or related fees like stamp duties, valuation fees.


We’re Answering Some of Your Most Asked Questions

1. Can I refinance my HDB home loan with POSB?

Yes, POSB offers lower loan rates than HDB. More benefits are available to successful applicants:

More interest income: You can earn up to 3% of income on a DBS Multiplier Account with a client with a refinancing loan with POSB. Today you can open the account with no minimum salary and the spending required.

Loan interest rates: From 1% to 1.4%

Maximum loan amount: 75% of the purchase price or a market price, whichever is lower.

Downpayment: 25% of the purchase price or a market price, whichever is lower. Of this, 5% must be in cash.

CPF as a downpayment: Of the 25%, 20% can come from your CPF account.

Cash reward: A reward of S$2,000 in cash is available to a successful applicant for loan refinancing.


2. What is the latest offer to HDB home loan applicants?

POSB is promoting the latest loan package, also applicable to HDB applicants. The interest rates are lower than the HDB floating-rate package. Here are the details:

FHR6 3-Year Lock-in Package Details
Year one FHR6+0.8% per annum
Year two FHR6+0.85% per annum
Year three FHR6+0.90 per annum
Year four and after that FHR6+1% per annum
Lock-in period Three years
Commitment period Three years
Minimum loan amount S$100,000
Interest rate cap Rates cap is up to three years of a maximum of 1.8% per annum
Commitment fee N/A


3. Does POSB offer a home renovation loan?

Yes, POSB offers green home renovation loan special to home loan borrowers:

Suppose you are an HDB client with POSB and plan to apply for a renovation with the bank. Good news! You are fit for the Green Renovation Loan Special! You can get as low as a 2.68% interest rate per annum on your renovation loan, and it is 1% off the 3.68% rate for non POSB’s clients.

All you have to do is 1. You are a POSB’s loan customer; 2. You pledge to fulfill the green energy criteria. The green energy criteria include:

  • Air quality: Use eco-friendly materials for renovating your home, like non-toxic coatings and paints.
  • Lighting: Use energy-efficiency LED lighting.
  • Thermal and acoustic comfort: Use solar products and energy-saving appliances to reduce heat.


Our Final Thoughts

We see POSB’s HDB home loan packages are suitable for floating-rate loan users. Below are the three takeaways:

  • The floating rate package has an interest rate cap of 2.3% per annum maximum for five years.
  • The floating-rate loan uses FHR6(the DBS Six-month Singapore Dollar Fixed Deposit Rate) as the basic rate plus a bank spread.
  • POSB does not charge the commitment and prepayment fees for an HDB loan.

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