10 Ways to Save Money on Your Mortgage Singapore: The Definitive Homejourney Guide

Saving money on your mortgage isn't just about finding the lowest interest rate—it's about understanding the complete landscape of mortgage optimization strategies available to Singapore homeowners. With interest rates at 3-year lows and falling, now is the ideal time to reassess your home loan strategy and unlock thousands of dollars in potential savings.

This comprehensive guide from Homejourney reveals 10 proven ways to reduce your mortgage costs, whether you're a first-time buyer, an existing homeowner, or an investor looking to optimize your property portfolio. We've analyzed current market conditions, bank offerings, and advanced mortgage strategies to create the definitive resource for mortgage savings in Singapore.

Table of Contents

• Understanding Your Mortgage Savings Potential
• Way 1: Refinance to Lower Rates When Lock-In Periods End
• Way 2: Break Fixed-Rate Lock-In Periods Strategically
• Way 3: Compare Rates Across All Major Banks
• Way 4: Optimize Your CPF Refund Strategy
• Way 5: Use Interest-Offset Accounts for Liquidity
• Way 6: Choose Your Loan Tenure Strategically
• Way 7: Master Partial Prepayment and Lump Sum Strategies
• Way 8: Select the Right Rate Type for Your Risk Profile
• Way 9: Negotiate Better Terms and Promotional Rates
• Way 10: Time Your Decisions Based on Market Cycles
• Frequently Asked Questions
• Your Next Steps with Homejourney

Understanding Your Mortgage Savings Potential

Before diving into the 10 strategies, it's important to understand the scale of potential savings available to Singapore homeowners. Consider this real example: A homeowner with a S$500,000 mortgage who refinances from a 3% fixed rate to a 1.6% fixed rate saves approximately S$500 per month—or S$6,000 annually. Over a 25-year loan tenure, this single decision could save over S$150,000 in interest payments.

The current mortgage landscape in Singapore presents unprecedented opportunities. With fixed-rate packages now starting from as low as 1.30% and floating rates from 1M SORA+0% (currently around 1.12%), homeowners have more leverage than ever before to negotiate better terms and reduce their borrowing costs.

At Homejourney, we believe mortgage optimization should be accessible to everyone. That's why we've created tools like our mortgage calculator and bank rates comparison feature to help you understand exactly how much you can save with each strategy. Our commitment to transparency and user safety means you'll always have accurate, current information to make confident decisions.

Way 1: Refinance to Lower Rates When Lock-In Periods End

Refinancing is one of the most straightforward ways to save money on your mortgage. When your lock-in period ends, you have the opportunity to switch to a lower rate without penalties. This strategy has become increasingly attractive as rates have fallen to 3-year lows.

The Current Opportunity: Many homeowners who refinanced one to two years ago are locked into rates between 2.8% and 3%. The difference between these rates and current offerings (1.4% to 1.8% for fixed packages) represents substantial savings. At OCBC Bank, homeowners with a S$500,000 loan could save up to S$4,100 in annual interest by switching to a five-year fixed rate package.

How to Execute: Start by checking your mortgage contract to identify when your lock-in period ends. Then, use Homejourney's bank rates comparison tool to see current offerings from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major banks. Calculate your potential savings using our mortgage calculator, which shows exactly how much you'll save monthly and over the life of your loan.

Important Considerations: Be aware of refinancing costs, including legal fees (typically S$800-1,500), valuation fees (S$400-800), and administrative charges. However, these costs are often recovered within 6-12 months through lower monthly payments. Mortgage advisers recommend switching when your lock-in period ends to avoid penalties, while remaining mindful of these associated costs.

Way 2: Break Fixed-Rate Lock-In Periods Strategically

If you're currently locked into a significantly higher fixed rate, breaking your lock-in period early might be worth considering—even with penalties. This advanced strategy requires careful calculation but can result in substantial long-term savings.

When This Makes Sense: Breaking a lock-in period only makes financial sense if the interest rate savings are substantial enough to offset the penalty. For example, if you're paying a 3% rate and can refinance at 1.6%, the 1.4% difference might justify a penalty of 1-2% of your remaining loan balance.

The Math: Let's say you have a S$400,000 remaining balance at 3% with 2 years left in your lock-in period. A typical early termination penalty might be 1.5% (S$6,000). If you refinance to 1.6%, you'd save approximately S$300 per month. Over 24 months, you'd save S$7,200 in interest, netting S$1,200 after the penalty. For the remaining 23 years of your loan, you'd continue saving S$300+ monthly.

Homejourney's Role: Our mortgage brokers can help you analyze whether breaking your lock-in period makes financial sense for your specific situation. Submit your details through our bank rates page, and we'll connect you with experts who understand the nuances of early termination penalties and can model different scenarios.

Way 3: Compare Rates Across All Major Banks

One of the simplest yet most effective ways to save money is comparing rates across multiple banks. Different banks offer different rates based on their funding costs, competitive positioning, and your profile (loan amount, tenure, employment type).

Current Rate Environment: As of January 2026, fixed-rate packages range from approximately 1.30% to 1.8%, while floating rates start from 1M SORA+0% (currently around 1.12%). This variation means choosing the right bank could save you thousands of dollars over your loan tenure.

Major Banks to Compare: DBS Bank, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB Bank, Public Bank, Hong Leong Bank, and Citibank all offer competitive packages with different features and rates.

Beyond Just the Rate: When comparing banks, don't focus solely on the headline interest rate. Consider other factors that affect your total cost of borrowing: lock-in periods (typically 1-3 years), repricing options, penalty-free partial repayment allowances, and flexibility features. Some banks offer more generous terms for larger loans (S$500,000+) or specific customer segments.

Homejourney's Advantage: Rather than visiting each bank individually, use Homejourney's bank rates comparison tool to see current offerings from all major lenders in one place. Our mortgage calculator helps you compare not just rates, but the actual monthly payments and total interest costs across different options. When you're ready to apply, submit through Homejourney's multi-bank application system—banks compete for your business when you apply through our platform, often resulting in better offers than if you applied directly.

Way 4: Optimize Your CPF Refund Strategy

One of the most overlooked mortgage savings strategies involves your Central Provident Fund (CPF). If you have idle cash in savings accounts earning less than 1% interest while simultaneously paying mortgage interest, you're missing a significant optimization opportunity.

The CPF Refund Arbitrage: Your CPF Ordinary Account earns 2.5% interest annually. If your mortgage costs less than 2.5% (which is increasingly common in the current rate environment), you can create a "sure-win" arbitrage by refunding your CPF and using that money to pay down your mortgage. This strategy captures the difference—potentially close to 1% per year—risk-free.

Example Calculation: Suppose you have S$50,000 in idle CPF savings and a mortgage at 1.6%. By refunding your CPF and using those funds to reduce your mortgage balance, you effectively "earn" the difference between your mortgage rate (1.6%) and your CPF interest rate (2.5%), netting you 0.9% annually on that S$50,000—or S$450 per year with zero risk.

Important Considerations: This strategy requires liquidity and discipline. You need sufficient cash reserves to make the CPF refund without leaving yourself vulnerable to emergencies. Additionally, you must be comfortable with the mechanics of CPF refunds and the regulatory requirements. Consult with a financial advisor to ensure this strategy aligns with your overall financial plan.

Homejourney's Guidance: When you apply for a mortgage through Homejourney, our mortgage brokers can discuss CPF optimization strategies as part of your overall financial planning. This holistic approach ensures you're not just getting the best rate, but structuring your entire mortgage in the most tax and cost-efficient way possible.

Way 5: Use Interest-Offset Accounts for Liquidity

Interest-offset accounts represent an advanced but highly effective strategy for mortgage optimization, particularly for homeowners with substantial liquid assets.

How Interest-Offset Accounts Work: An interest-offset account (offered by select offshore banks in Singapore) reduces the portion of your loan on which interest is charged. For example, if you have a S$500,000 mortgage and park S$100,000 in your offset account, you only pay interest on S$400,000.

The Unique Advantage: Unlike lump sum prepayments that permanently reduce your loan balance, offset accounts maintain your liquidity. You can access your parked cash for emergencies or opportunities while still benefiting from the interest savings. This creates a "risk-free return" equal to your mortgage rate.

Liquidity Structuring: A sophisticated approach involves parking 70% of your offset funds to reduce interest charges while keeping 30% liquid for emergencies. This balanced structure provides substantial interest savings while maintaining financial flexibility for unexpected situations or investment opportunities.

When This Strategy Makes Sense: Interest-offset accounts are most valuable for homeowners with: (1) substantial liquid assets beyond their emergency fund, (2) ongoing income that generates cash flow, (3) potential upcoming expenses or investment opportunities, and (4) desire to maintain maximum flexibility while optimizing mortgage costs.

Way 6: Choose Your Loan Tenure Strategically

Your loan tenure—the period over which you repay your mortgage—has a dramatic impact on both your monthly payments and total interest costs. Understanding tenure optimization is crucial for long-term mortgage savings.

The Tenure Tradeoff: Most home loans in Singapore run between 20 and 30 years. A longer tenure lowers monthly repayments but increases total interest paid over time. Conversely, a shorter tenure increases monthly payments but significantly reduces total interest costs.

Numerical Example: Consider a S$500,000 mortgage at 2% interest:

• 20-year tenure: Monthly payment ≈ S$2,550; Total interest ≈ S$112,000
• 25-year tenure: Monthly payment ≈ S$2,110; Total interest ≈ S$133,000
• 30-year tenure: Monthly payment ≈ S$1,850; Total interest ≈ S$166,000

The difference between a 20-year and 30-year tenure is S$54,000 in additional interest—a significant amount that many borrowers overlook.

Strategic Approach: Rather than automatically choosing the longest tenure to minimize monthly payments, consider your financial situation holistically. If you can afford a 25-year tenure instead of 30 years, you'll save substantially on interest. Alternatively, you might choose a longer tenure initially for cash flow flexibility, then use strategy #7 (prepayment) to accelerate payoff without the initial payment burden.

Homejourney's Tenure Calculator: Use our mortgage calculator to model different tenure scenarios. See exactly how choosing a 25-year tenure instead of 30 years affects your monthly budget, and understand the long-term interest savings. This informed approach helps you make tenure decisions aligned with both your current budget and long-term financial goals.

Way 7: Master Partial Prepayment and Lump Sum Strategies

Prepayment strategies—making additional payments beyond your regular monthly installments—can dramatically reduce your total interest costs and shorten your loan tenure. However, the approach you choose matters significantly.

Partial Prepayment vs. Lump Sum: Most Singapore banks allow two types of additional payments: partial prepayments (regular additional monthly payments) and lump sum prepayments (one-time large payments, often using bonuses or CPF withdrawals). Each has distinct advantages depending on your financial situation and goals.

For a detailed analysis of which approach saves more for your specific circumstances, see our comprehensive guide on Partial Prepayment vs Lump Sum: Which Saves More on Singapore Mortgages? | Homej... ">Partial Prepayment vs Lump Sum: Which Saves More on Singapore Mortgages? | Homej... .

Prepayment Impact Example: On a S$500,000 mortgage at 2% over 25 years (monthly payment S$2,110), adding just S$200 to your monthly payment reduces your total interest by approximately S$18,000 and shortens your tenure by 2.5 years. Larger prepayments have even more dramatic effects.

Important Consideration: Before prepaying, ensure you have an adequate emergency fund (3-6 months of expenses) and that you're not sacrificing other financial goals like retirement savings or investment opportunities. Prepayment is optimal when you have surplus cash flow and are confident in your financial stability.

Bank-Specific Rules: Different banks have different prepayment policies. Some allow penalty-free partial repayment within lock-in periods, while others don't. When comparing banks through Homejourney, pay attention to these flexibility features—they can significantly impact your ability to optimize your mortgage over time.

Way 8: Select the Right Rate Type for Your Risk Profile

One of the most important mortgage decisions is choosing between fixed-rate and floating-rate loans. This choice affects not just your current payments, but your financial flexibility and risk exposure over the entire loan tenure.

Fixed-Rate Mortgages: A fixed-rate loan locks your interest rate for a set period (typically 1-3 years), meaning your monthly repayment stays constant during this time. This suits buyers who value payment certainty and prefer clear budgeting, especially during the early years of ownership. Current fixed-rate packages start from approximately 1.30% to 1.8%.

Floating-Rate Mortgages: Floating packages are structured around SORA (Singapore Overnight Rate Average) plus a bank spread. As SORA changes, your interest rate and monthly payment adjust accordingly. Floating options are ideal for borrowers who review loans regularly, are comfortable with rate fluctuations, and want to benefit from further rate decreases.

Current Market Context: The chart below shows recent SORA trends to help you understand how rates have moved:

As you can see from the chart above, SORA has declined significantly through 2025, and floating mortgage rates have fallen faster than fixed packages. This is because fixed rates price in future expectations and funding risks, while floating rates respond directly to current market conditions.

Decision Framework: Choose fixed rates if you: prefer payment certainty, are risk-averse, plan to stay in your home long-term, or believe rates will rise. Choose floating rates if you: are comfortable with payment variability, actively monitor rate movements, plan to refinance strategically, or believe rates will continue falling.

Hybrid Approach: Some homeowners use a hybrid strategy—fixing for the first few years to lock in low rates and ensure payment stability, then switching to floating when they've built equity and have more financial flexibility.

Way 9: Negotiate Better Terms and Promotional Rates

Many homeowners accept the first rate a bank offers without realizing there's significant room for negotiation. Banks actively compete for mortgage business, and your profile—loan amount, employment stability, existing banking relationships—affects what rates they're willing to offer.

Negotiation Leverage Points: Banks are more willing to negotiate on: (1) larger loan amounts (S$500,000+), (2) bundled products (combining mortgage with savings, investments, or insurance), (3) stable employment profiles (civil servants, professionals), (4) existing banking relationships, and (5) when multiple banks are competing for your business.

Promotional Rates: Banks regularly introduce promotional rates starting from about 1.35% to attract new customers. These rates are often available for a limited time or specific customer segments. By comparing rates through Homejourney, you'll see current promotional offerings and can leverage them in negotiations with your preferred bank.

Negotiation Strategy: When you receive rate quotes from multiple banks, use them as negotiating tools. Tell your preferred bank, "Bank A has offered me 1.5% for 2 years—can you match or beat this?" Banks often will, particularly if you're bringing a substantial loan amount or have other banking relationships with them.

Homejourney's Multi-Bank Application Advantage: When you submit your application through Homejourney's bank rates page, you're essentially creating a competitive bidding situation where multiple banks are competing for your business. This competitive dynamic often results in better rates and terms than if you applied directly to a single bank. Our mortgage brokers can also help you understand which banks are most likely to negotiate based on your profile.

Way 10: Time Your Decisions Based on Market Cycles

Interest rates move in cycles, and timing your refinancing, repricing, or new mortgage application to align with favorable market conditions can result in substantial savings. Understanding these cycles and tracking rate movements is the final piece of comprehensive mortgage optimization.

Current Market Cycle: Singapore is currently in a favorable borrowing environment with rates at 3-year lows. This creates urgency for homeowners with higher-rate mortgages to refinance before rates potentially rise. However, timing doesn't mean trying to pick the absolute bottom—it means acting when rates are demonstrably lower than your current rate and the savings justify the refinancing costs.

SORA Tracking for Floating Rates: If you have a floating-rate mortgage, tracking SORA movements helps you time repricing decisions and understand when your payments might change. Homejourney provides real-time SORA tracking so you can monitor 3M and 6M SORA rates and understand how they're likely to affect your mortgage payments.

Rate Cycle Wisdom: As mortgage experts note, "interest rate cycles move in waves and it is important to learn how to ride them rather than reacting to them." This means: (1) don't panic-refinance at the first rate drop, but act decisively when rates are substantially lower; (2) don't assume rates will keep falling indefinitely—lock in good rates when available; (3) build flexibility into your mortgage structure so you can adapt as conditions change.

Action Trigger Points: Consider refinancing or repricing when: (1) your lock-in period is ending and rates are lower, (2) you can save 0.5% or more on your interest rate, (3) refinancing costs will be recovered within 12-18 months of savings, or (4) you're moving from a fixed to floating rate in a declining rate environment.

Homejourney's Rate Tracking Tools: Use our real-time SORA tracking and rate comparison tools to stay informed about market movements. Set up alerts for when rates hit certain thresholds, so you're notified when refinancing might make sense for your situation. This proactive approach ensures you never miss a significant savings opportunity.

Frequently Asked Questions About Mortgage Savings

What's the difference between refinancing and repricing?

Refinancing means switching to a completely new mortgage from a different bank or lender, involving new legal documentation, valuation fees, and a fresh application process. Repricing means changing the interest rate or terms of your existing mortgage with your current bank, which is simpler and involves fewer fees. Both can result in savings, but repricing is faster and cheaper if your current bank offers competitive rates.

How much does refinancing cost, and when is it worth it?

Refinancing typically costs S$1,200-2,300 in total fees (legal, valuation, administrative). It's worth refinancing when you can save 0.5% or more on your interest rate—this difference usually recovers refinancing costs within 12-18 months and continues saving money for the remaining loan tenure. Use Homejourney's mortgage calculator to calculate your break-even point.

Should I choose a fixed or floating rate mortgage?

Fixed rates suit borrowers who value payment certainty and are risk-averse. Floating rates suit borrowers comfortable with payment variability and who actively monitor rate movements. In the current declining rate environment, floating rates have fallen faster than fixed rates, but this advantage could reverse if rates start rising. Consider your risk tolerance, financial stability, and long-term plans.

What's the ideal loan tenure—20, 25, or 30 years?

There's no universal "ideal" tenure—it depends on your financial situation. A 20-year tenure minimizes total interest paid but requires higher monthly payments. A 30-year tenure maximizes affordability but costs significantly more in interest. Many homeowners choose 25 years as a middle ground, or start with 30 years and use prepayment strategies to accelerate payoff. Use our tenure calculator to model options for your specific situation.

Can I break my fixed-rate lock-in period early?

Yes, but there's typically a penalty (usually 1-2% of your remaining balance). Breaking early only makes sense if the interest rate savings are substantial enough to offset the penalty. For example, if you're paying 3% and can refinance at 1.6%, the 1.4% difference likely justifies a 1-2% penalty. Calculate the math carefully or consult a Homejourney mortgage broker to determine if early termination makes financial sense.

How much can I save by refinancing from 3% to 1.6%?

On a S$500,000 mortgage, reducing your rate from 3% to 1.6% saves approximately S$500 per month or S$6,000 annually. Over a 25-year loan tenure, this single decision could save over S$150,000 in total interest payments. Use Homejourney's mortgage calculator to calculate exact savings for your loan amount, current rate, and new rate.

What's the CPF refund strategy, and is it right for me?

The CPF refund strategy involves refunding your CPF Ordinary Account (which earns 2.5% interest) and using those funds to pay down your mortgage if your mortgage rate is lower than 2.5%. This captures an arbitrage of the difference—risk-free. It's ideal for homeowners with idle CPF savings and sufficient emergency reserves, but requires careful planning and financial discipline.

How often should I review my mortgage?

Review your mortgage at least annually, or whenever your lock-in period is ending, rates drop significantly (0.5%+), or your financial situation changes materially. Many homeowners review more frequently (quarterly or semi-annually) to track SORA movements and identify refinancing opportunities. Homejourney makes this easy with our rate comparison and tracking tools.

What's SORA, and how does it affect my mortgage?

SORA (Singapore Overnight Rate Average) is the benchmark interest rate used by most Singapore banks for floating-rate mortgages. As SORA changes, your mortgage interest rate and monthly payment adjust accordingly. SORA reflects actual overnight interbank borrowing costs, so floating rates respond more directly to market conditions than fixed rates. Track SORA movements through Homejourney to understand how your mortgage payments might change.

Should I prepay my mortgage or invest the money instead?

This depends on your mortgage rate versus expected investment returns, your risk tolerance, and your financial goals. If your mortgage is at 1.6% and you can earn 4-5% through investments, investing might be optimal. However, prepayment provides a guaranteed return equal to your mortgage rate and reduces financial risk. Many homeowners use a balanced approach—prepaying some while investing some. Consult a financial advisor for personalized guidance.

How do I know if I'm getting the best mortgage rate?

Compare rates from multiple banks using Homejourney's bank rates comparison tool. Check rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major lenders. Look beyond the headline rate to consider lock-in periods, repricing options, and flexibility features. When you're ready to apply, submit through Homejourney's multi-bank application system—banks compete for your business, often resulting in better rates than direct applications.

What happens to my mortgage if interest rates rise significantly?

If you have a fixed-rate mortgage, your payments won't change during the lock-in period, providing protection against rate rises. If you have a floating-rate mortgage, your payments will increase as rates rise. This is why fixed rates appeal to risk-averse borrowers and floating rates appeal to those comfortable with variability. Choose based on your risk tolerance and beliefs about future rate movements.

Can I switch banks mid-loan?

Yes, you can refinance to a different bank at any time, though you may face early termination penalties if you're still in a lock-in period. Once your lock-in period ends, you can switch without penalties. Refinancing to a different bank involves new legal documentation and fees but can result in substantial savings if rates are significantly lower. Use Homejourney to compare banks and calculate whether switching makes financial sense.

What's the difference between 1M SORA and 6M SORA?

1M SORA (1-month) resets monthly and responds quickly to rate changes, while 6M SORA (6-month) resets every six months and is more stable. 1M SORA mortgages have lower initial rates but more payment volatility, while 6M SORA mortgages have slightly higher rates but more stable payments. Choose based on your preference for payment predictability versus initial rate savings. Track both rates through Homejourney to understand current market conditions.

How does my employment type affect mortgage rates?

Banks often offer better rates to borrowers with stable employment, particularly civil servants and professionals in established fields. Self-employed individuals and those with variable income may face slightly higher rates or stricter lending criteria. However, Homejourney's bank comparison tool shows rates for all employment types, so you can see what different banks are offering for your specific profile.

What's the relationship between loan amount and interest rate?

Larger loan amounts (typically S$500,000+) often qualify for better rates than smaller loans. Banks offer sharper pricing for larger loans because they generate more interest revenue. If you're buying a property in the S$500,000+ range, you have more negotiating leverage. Use this to your advantage when comparing banks or negotiating rates through Homejourney.

Should I get a mortgage broker or apply directly to banks?

Mortgage brokers (like those available through Homejourney) can save you time by comparing multiple banks simultaneously and helping you navigate the application process. They also often have access to promotional rates and can advocate for better terms. However, you can also apply directly to banks. Homejourney's advantage is that our multi-bank application system creates competitive pressure, often resulting in better offers than direct applications.

How do I calculate my borrowing power and how much house I can afford?

Your borrowing power is determined by your income, existing debts, and the bank's lending criteria (typically allowing Total Debt Servicing Ratio up to 60%). Use Homejourney's mortgage eligibility calculator to estimate your borrowing power instantly. This helps you understand your budget before property hunting, ensuring you focus on properties within your financial reach.

What are the hidden costs of mortgages beyond interest?

Beyond interest, mortgage costs include: legal fees (S$800-1,500), valuation fees (S$400-800), administrative charges, insurance (mortgage protection insurance), property tax, and maintenance costs. When comparing mortgages, factor in all these costs, not just the interest rate. Homejourney's comprehensive approach helps you understand total borrowing costs, not just headline rates.

Your Next Steps: Implementing Mortgage Savings with Homejourney