If you own a HDB flat, chances are you’re currently servicing a loan from HDB, which is a stable option of financing your home. It is undoubtedly a long-term commitment that will stretch across many years, but it is a relatively safe option, structured around stable income and careful financial planning.
That said, sometimes life can get in the way. We certainly don’t wish it on anyone, but sometimes life can be unpredictable: sudden job losses, medical emergencies, or unexpected changes in household finances can make it difficult to keep up with monthly repayments. What actually happens if you’re unable to repay your HDB loan? From missed instalments and late-payment penalties, to foreclosure and the potential loss of your flat, the consequences can be serious and far-reaching.
In this article, we explain the default process, the penalties involved, and what homeowners can expect, as well as the options you can explore before matters reach a breaking point.
What does it mean to default on HDB loan repayment?
Image credit: HDB
As you know, paying back your monthly installments is pretty straightforward. They are due on the 1st of each month until your loan is fully repaid.
If you are paying by CPF or GIRO, deductions will be made automatically. Monthly CPF deductions take place on the Sunday between the 6th and 12th of the month (both dates inclusive), and for GIRO, deductions are on the 28th of the month. Otherwise, alternative payment options include PayNow, internet banking, AXS, and cash payment at HDB branch offices.
If you miss your monthly instalment payment, then HDB will impose a late payment charge. Currently, the late payment charge rate is 6.0% per annum from 1st October 2025 to 31st March 2026, and is reviewed bi-annually. Late payment charges will be imposed on the outstanding instalment as at the end of every month, rounded up to the nearest $0.05. The modes of payment for arrears are similar to that of the loan monthly instalments.
Based on what others have shared online, HDB is generally quite gracious to those who unintentionally miss their monthly installment, or make payment that is marginally past the due date. If it’s your first time, you can call up the HDB hotline to explain the circumstances━and they are generally quite gracious to waive it off the first time around. However, if you continually miss your payments, the late charges will compound and snowball into a pretty hefty amount in arrears. And if they remain unpaid over time despite repeated reminders, then the HDB may classify the loan as having been defaulted, and impose stricter measures.
How to get financial assistance for your HDB loan repayments?
Theoretically, if you continually miss your loan repayments, HDB has the right to seize possession of your flat and sell it off so as to recover any outstanding debt. In reality, the HDB only pursues that as a last resort, and often utilises other means first, such as offering Financial Assistance Measures (FAM) or restructuring the loan.
Image credit: Reddit
To apply for the FAM, you will have to book an appointment at a HDB branch, and bring along documents such as identification, your latest payslips or income letters, CPF information, and documentary proof of financial hardship such as outstanding bills.
Each application will be assessed on a case-by-case basis, and assuming you get approval, here are some possible options available:
FAM Short Term Options
To help those facing a temporary period of financial hardship due to job or income loss, there are a couple of short-term options available.
For instance, some measures include repaying the loan arrears by instalment within a reasonable period of time, and/or reducing or deferring your monthly loan instalments for a continuous 6-month period.
Image credit: NTUC
For applicants who are unemployed, you will also be offered a placement on the Homeowner Job Support (HJS) pilot scheme, which was launched in April last year. Under the scheme, mortgage interest for home owners in mortgage arrears will be suspended for one year, and your monthly loan installments will be reduced or deferred.
Under the scheme, you’ll also work with a career coach from Workforce Singapore (WSG) or the Employment and Employability Institute (e2i) to secure a permanent full-time job.
FAM Long Term Options
If you require longer term options, then the HDB may allow you to extend your loan tenure up to the maximum repayment period, which will lower the quantum of monthly instalments. This option of extending your loan tenure is subject to an eligibility criteria, and an age limit of 65 years.
Image credit: Reddit
Otherwise, other options include renting out your spare bedrooms to generate additional income, including working adult family members as joint home owners to help pay for the loan instalments and/or arrears, or even selling your flat and downsizing to a smaller one that is more financially manageable.
What happens if you still continue to default on your loan?
We hope it won’t come to this, but if you continue to not pay your loans and arrears, or show some form of endeavour to do so, then HDB’s last resort will be to seize your flat.
In 2023, HDB evicted a woman from her flat after she had failed to pay her mortgage, owing HDB around $106,000. She had previously applied for and had been granted temporary deferment of her payment obligations, including temporary reductions of her monthly mortgage payments back in 2003 and 2004, however she still could not manage to keep up with her loan repayments thereafter. After many years, the HDB proceeded with compulsory acquisition of her flat in 2021, and still prepared a 1-room rental flat for her to move into.
As you can see, HDB is generally quite gracious to those who either miss or are unable to pay off their HDB loans, and are quite accommodating in deferring payment obligations━so long as you demonstrate a willingness to pay back your loan eventually.
Forceful acquisition is a last resort, and there are often many many alternatives which are offered before it comes to eviction. And even if it comes to that, you won’t be left homeless; in the case of the woman above, HDB had prepared a low-cost rental flat for her so that she would still have a place to stay.
HDB loan repayments: all you need to know about default & financial assistance
To conclude, a HDB loan is generally a fuss-free and stable mode of financing your HDB flat purchase. However, unforeseen circumstances can arise, and when that happens, some of us might struggle to keep up with our repayments.
Fortunately, there are plenty of measures available to help out those in need, and HDB is generally very understanding. Even though the eventual penalty is eviction, you will have to have shown wanton unwillingness over a long period of time to reach that stage. Of course, the best course of action is to keep up with your loan repayments promptly, so as to avoid winding up in such a scenario.
For more reads:
- Record-breaking 5-room HDB flat sales in January 2026
- Why we chose to downsize from EA to 3-room HDB after >20 years
- >13,000 HDB flats reaching MOP in 2026
Cover image adapted from: Unsplash, Uchify
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