Regular readers will know that we are currently on an HDB housing loan (~1 year). The reasons were we didn’t want to fork out any cash for downpayment and wanted to repay the loan as slow as possible. Had we taken a bank loan then, we would need at least 5% cash for downpayment and the remaining 20% in CPF/cash as compared to just 10% CPF for downpayment for an HDB housing loan.

Let me illustrate with some numbers:
Our BTO purchase price – $420k
HDB housing loan – $42k in CPF (downpayment) + $378k loan
Bank loan – at least $21k cash + $84k in CPF (downpayment) + $315k loan

Hence, it is very unlikely for young couples to take a bank loan for their first HDB purchase as the initial cash/CPF outlay is simply too large. For more information, you can take a look at this Seedly article – A Homeowner’s Ultimate Guide: Bank