You may have heard on public forums about refinancing your HDB loan with HDB bank loan.
There is the HDB concessionary loan currently at the interest rate of 2.6%. And then there is the HDB market rate loan currently at 3.82%.
The HDB concessionary loan is a very attractive home loan. No other lender can match the stability of the HDB concessionary loan. If you were to compare a HDB bank loan with a HDB concessionary using a HDB bank loan calculator, you may find that the attractive rates offered by the banks can help you make some savings. However these are not guaranteed in the long term, especially when bank loan interest rates start to float. That means your are potentially forgoing long term stability for short term savings. And your short term savings may not be very significant. A HDB bank loan calculator should easily illustrate this for you to make HDB bank loan comparison.
Whereas a market rate loan of 3.82% is a big difference from the concessionary rate of 2.6%. It is almost a 50% difference in interest rates. If you can save $60 a month from refinancing your HDB market rate loan with a HDB bank loan, that will translate to $21.6k over 30 years. That is a pretty big sum that cannot be ignored. Over the years, HDB has encouraged home owners to make their own informed housing loan decisions by opening up the market for financing HDB flats to the private sector. If you are going to save over twenty thousand dollars over the long term through refinancing your HDB loan with HDB bank loan, you should seriously consider doing it. And always use a HDB bank loan calculator to conduct proper apple-to-apple HDB bank loan comparison.
However, do realise that when you do take up a HDB bank loan, you are now dealing with a bank. If you default on your loan, the bank may be less lenient than HDB.
Also note the legal costs involved in refinancing your HDB loan with HDB bank loan. The fee can vary depending on which lawyer you engage. Most bank offer attractive subsidies on these legal costs. On some instances, you may also find that they will fully settle it for you. So shop around for the best deals on HDB bank loans.