Hey guys! Purchasing your first HDB flat soon? Confused by the different housing loans available on the market? You’ve come to the right place. Here’s a beginner’s guide on Home Loans! The interest rate for a HDB loan is generally higher than that of a bank loan, but it’s more stable. The current interest rate for a HDB Loan for 2017 is at 2.6%. On the other hand, interest rates for bank home loans currently range between 1.08% and 2.48%. At first glance, it may seem that bank loans are the way to go. However, all bank loans come with a lock-in period. A lock-in period refers to the number of years in which your loan’s interest rate doesn’t change. It generally lasts for 3 years. When the lock-in period ends, the interest rate might change depending on market forces. Bank home loans require a 20% down payment. You can use your CPF to pay for three-quarters of the down payment, but the remaining one-quarter must be paid for in cash. Whoa! HDB loans require a 10% down payment, which can be fully paid for using your CPF. If you can suddenly afford to pay off your HDB loan in full, you can do so without any restrictions. However, for a bank home loan, there’ll be a fee of 1.5 to 1.75% on your balance loan amount. Late fees for bank home loans come in at 24% per annum. For a HDB loan, the late payment fee is at 7.5% per annum. So, no matter what, make sure that you repay your loans on time. Still confused? Don’t be. GoBear can help you compare all available home loans across different banks easily. We can also connect you with a mortgage specialist who can give you personal advice. Till next time… See ya!