10 Ways to Save Money on Your Mortgage: Frequently Asked Questions
Saving money on your mortgage is essential for Singapore homebuyers and homeowners facing 2025's interest rate environment. This guide answers key questions on 10 ways to save money on your mortgage, drawing from current trends like falling SORA rates and Homejourney's trusted tools for mortgage savings tips[3][8].
As a cluster article supporting our pillar 10 Ways to Save Money on Your Mortgage in Singapore, it provides tactical FAQs with Singapore-specific advice. Homejourney prioritizes your safety by verifying bank rates from DBS, OCBC, UOB, and more at https://www.homejourney.sg/bank-rates, helping you reduce mortgage costs confidently[1][3].
Why Focus on Mortgage Savings in 2025?
Singapore's mortgage rates are at 3-year lows, with fixed packages at 2.40%-2.70% p.a., down from 2024[3][8]. Yet, with SORA pegged loans common, timely action can cut interest costs significantly. For a S$800,000 HDB loan at 25 years, dropping from 3% to 2.5% saves ~S$28,000 over the tenure[3].
Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator shows your exact savings potential. Use Singpass for paperless applications—banks compete for better offers, ensuring trust and transparency[1].
10 Ways to Save Money on Your Mortgage: Key FAQs
Here are the top 10 strategies, answered with actionable steps for HDB and private property owners.
1. How Can a Larger Downpayment Save Me Money?
A bigger downpayment reduces your loan quantum, slashing total interest. For a S$600,000 BTO flat, paying 30% (S$180,000) vs 20% (S$120,000) via CPF/cash lowers the loan to S$420,000, saving ~S$50,000 in interest at 2.5% over 25 years[3]. Action: Maximize CPF Ordinary Account (OA) up to limits—check via CPF Withdrawal Limits Guide.
2. When Should I Refinance or Reprice?
Refinance 3-4 months before lock-in ends if rates >3%, potentially saving S$100+/month[2][3]. Reprice within your bank for free if offered. Compare DBS, OCBC, UOB at Homejourney—fixed rates now 2.40%-2.70%[3].
3. What's the Best Loan Tenure for Savings?
Shorter tenures (e.g., 20 vs 30 years) reduce interest but raise monthly payments. For S$500,000 at 2.5%, 20-year saves S$60,000 vs 30-year but needs S$2,650/month vs S$1,980[3]. Use Homejourney calculator to balance affordability.
4. How Does Using CPF Optimize Payments?
CPF OA at 2.5% accrued interest often beats bank rates, freeing cash[6]. Pay minimum cash, max CPF—e.g., S$2,000/month CPF covers most for HDB. See 5 CPF Strategies for details[3].
5. Are Fixed or Floating Rates Better in 2025?
SORA (Singapore Overnight Rate Average) floating rates track market falls[3]. Current 3M SORA ~2.8%; fixed offers stability at 2.40%[3]. The chart below shows recent trends:
The chart below shows recent interest rate trends in Singapore:
Rates have trended lower, favoring floating for savers[2][8]. Hybrid DBS packages split 50/50 fixed-floating[3].
6. Can Prepayments Reduce My Loan?
Yes, extra payments cut principal early. S$10,000 prepay on S$400,000 loan saves ~S$15,000 interest[1]. Banks allow 1-2% annual without penalty—track via Homejourney.
7. How to Negotiate Better Rates?
Highlight payment history; multi-bank apply via Homejourney for competing offers from HSBC, Maybank[1]. Rates can drop 0.2-0.5%[2].
8. What's the Impact of Budget Tweaks?
Cut non-essentials (subscriptions, dining) to free S$200-500/month for overpayments[1]. Build 3-6 months emergency fund first.
9. Should I Consider Loan Restructuring?
Extend tenure temporarily for lower payments, but weigh higher total interest[1]. HDB schemes assist eligible[1].
10. How to Time Refinancing with Rate Cuts?
Monitor SORA via Homejourney; refinance post-Fed cuts expected fewer in 2025[2]. Break-even: Savings cover fees in 2-3 years[2][4].
Action Plan to Lower Home Loan Payments
- Calculate eligibility at Homejourney calculator.
- Compare rates from 11 banks including CIMB, RHB.
- Apply via Singpass for best offers.
- Track SORA; refinance if >3%.
- Max CPF, prepay annually.
Disclaimer: This is general advice; consult professionals. Rates as of Dec 2025[3].
Frequently Asked Questions
Can I save money if my rate is already low?
Yes, via prepayments or CPF optimization—even 0.1% drop on S$1M loan saves S$10,000[3].
Is refinancing worth the fees?
If savings exceed fees in 24 months, yes. Use Homejourney tools for break-even calc[2][4].
How much CPF can I use?
Up to available OA balance; limits per property type. Details in our CPF Guide[3].
What's the safest way to compare rates?
Homejourney verifies rates securely—no data sharing without consent.
When to refinance HDB vs private property?
Same rules, but HDB has ABSD/SSD considerations[1].
Ready to save money on your mortgage? Start at Homejourney bank rates, then search properties at https://www.homejourney.sg/search. For full strategies, read our pillar guide: 10 Ways to Save Money on Your Mortgage in Singapore.
