10 Ways to Save Money on Your Mortgage in Singapore | Homejourney
Save money on your mortgage with this definitive Homejourney guide. In Singapore's competitive property market, reducing mortgage costs can save you tens of thousands over your loan tenure. Whether you're a first-time HDB buyer or refinancing your condo loan, these 10 strategies deliver real mortgage savings tips backed by current 2026 data.
Homejourney prioritizes your financial safety through transparent tools like our bank rates comparison, where you can compare DBS, OCBC, UOB and more. We've helped thousands lower home loan payments safely. Disclaimer: This guide provides general education; consult licensed financial advisors for personalized advice.
Table of Contents
- Executive Summary
- 1. Understanding Your Mortgage Costs
- 2. Way 1: Shop and Compare Bank Rates
- 3. Way 2: Choose the Right Loan Tenure
- 4. Way 3: Opt for Shorter Lock-In Periods
- 5. Way 4: Time Your Refinancing Perfectly
- 6. Way 5: Maximize CPF Usage
- 7. Way 6: Make Strategic Prepayments
- 8. Way 7: Negotiate with Banks
- 9. Way 8: Fixed vs Floating: Pick Wisely
- 10. Way 9: Monitor SORA Trends
- 11. Way 10: Avoid Common Pitfalls
- Mortgage Savings Calculator Table
- Your Mortgage Savings Action Plan
- FAQ: Saving Money on Singapore Mortgages
- Next Steps with Homejourney
Executive Summary: Why Mortgage Savings Matter in 2026
Singapore home loan rates hit 3-year lows in 2026, with fixed packages from 1.35% and floating SORA-linked rates around 1.09%[1][2]. For a S$500,000 loan, switching can save S$4,100 yearly[2]. HDB owners increasingly refinance from 2.6% concessionary rates to bank loans below 2%[1].
This pillar guide covers 10 ways to save money on your mortgage, from CPF optimization to repricing timing. Expect 3,500+ words of actionable advice, real calculations, and Homejourney tools. Primary keywords like reduce mortgage costs and cut interest costs guide your search for savings.
Key insight: Small changes compound. A 0.5% rate drop on S$800,000 over 25 years saves S$62,000. Homejourney's mortgage calculator shows your exact savings instantly.
Understanding Your Mortgage Costs in Singapore
Mortgage costs include interest (70-80% of total payments), principal, and fees. Under MAS TDSR rules, loans can't exceed 55% of income. HDB flats cap at 75% LTV; private properties 55%[official HDB/URA].
Total interest on S$500k at 2% over 25 years: S$274,000. At 1.5%: S$202,000. Savings: S$72,000. Use Homejourney's eligibility calculator to verify your borrowing power before committing.
Singapore's unique factors: CPF Ordinary Account (OA) at 2.5% interest outpaces many loans. SORA (Singapore Overnight Rate Average) replaced SOR in 2024 as the key benchmark[1].
Way 1: Shop and Compare Bank Rates Aggressively
The #1 way to lower home loan payment: Compare all banks. Rates vary: DBS fixed 1.6%, OCBC 1.4-1.8%, UOB promotional 1.35%[1][2]. Homejourney aggregates DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, Citibank.
Action steps:
- Visit Homejourney bank rates for live comparisons.
- Filter by fixed/floating, tenure, loan size.
- Apply via Singpass for multi-bank offers—banks compete for you.
Example: S$600k loan. Best rate 1.4% vs average 1.8%: S$250/month saved, S$90,000 over 25 years.
Way 2: Choose the Optimal Loan Tenure
Shorter tenure = less interest but higher monthly. 20 vs 30 years on S$500k at 1.8%:
Source: Standard amortization formula. Use Homejourney calculator to model your scenario. Insider tip: HDB allows tenure up to age 65/70; aim for retirement payoff.
Way 3: Select Loans with Flexible Lock-In Periods
Most loans have 2-year lock-ins[5]. Choose 1-year for faster repricing. Penalty for early exit: 1.5% of prepaid amount. If rates drop (as in 2026[2]), reprice sooner.
OCBC/DBS offer penalty-free partial prepayments up to 20% yearly[2]. This lets you cut interest costs without refinancing fees (S$2,000-5,000).
Way 4: Time Your Refinancing and Repricing
Refinance when lock-in ends; costs S$2k-4k but saves if rate drops >0.5%. Ms. Denise Chan saved S$500/month repricing DBS from 3% to 1.6%[2].
Break-even: S$3,000 fees / S$300 monthly savings = 10 months. HDB owners: Bank loans now beat 2.6% concessionary rate[1]. Use Homejourney to track.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA fell to 3-year lows, driving refinancing surges[2].
Way 5: Maximize CPF for Mortgage Payments
CPF OA earns 2.5%; use it when > loan rate. For 1.5% loan, pay with OA to arbitrage 1% gain. Limits: Up to Available Balance; restore via monthly top-up.
Deep dive: CPF OA vs现金还房贷哪个更划算？Homejourney权威指南 ">CPF OA vs Cash: Which is Better?. Example: S$1,000 OA payment saves S$12/year net vs cash at 1% opportunity cost.
Strategies: 用CPF优化房贷的5个策略 | Homejourney新加坡房产指南 ">5 CPF Optimization Tips. Homejourney verifies your CPF limits safely.
Way 6: Make Smart Prepayments
Prepay principal reduces interest base. S$10k prepay on S$500k loan at 1.8% saves S$20k over 25 years. Banks allow 4x monthly installment free annually.
Strategy: Prepay after bonuses; target high-interest periods. HDB: Up to 50% via CPF. Track via Homejourney calculator.
Way 7: Negotiate Better Terms with Banks
Leverage competing offers. "Homejourney shows OCBC at 1.4%; can you match?" Often wins 0.1-0.2% cuts. Works for DBS/HSBC packages[1].
Pro tip: Apply multi-bank via Homejourney—banks bid lower. Includes waiver of fees for high-value loans (S$1M+).
Way 8: Fixed vs Floating – Choose Based on Outlook
Fixed: Stability (80% choose[2]). 2-5 year packages 1.4-1.8%[1]. Floating: SORA + spread (1.09% now[5]). If rates fall further, floating wins.
Risk-averse? Fixed. Optimistic? Floating. Compare on Homejourney.
Way 9: Monitor SORA and Market Trends
SORA drives 90% loans. Track 3M/6M SORA on Homejourney. 2026 lows: 1M SORA +0% =1.09%[5]. Reprice when +spread >0.5% below current.
Outlook: Modest falls ahead[2]. Time repricing post-lock-in.
Way 10: Avoid Costly Mistakes That Drain Savings
Common pitfalls:
- Long tenure without prepay plan—increases interest 2x.
- Ignoring fees: Valuation S$500, legal S$2k.
- Cash over CPF when rates low.
- Missing TDSR buffer—future hikes hurt.
Full guide: 使用CPF减轻房贷负担完整指南 | Homejourney新加坡2026 ">Using CPF to Reduce Burden.
Mortgage Savings Comparison Table
Total potential: S$197,000. Verify with calculator.
Your 10-Step Mortgage Savings Action Plan
- Today: Calculate eligibility on Homejourney.
- Week 1: Compare rates across 11 banks.
- Month 1: Apply multi-bank via Singpass.
- Lock-in end: Reprice/refinance if savings >0.5%.
- Quarterly: Check SORA, prepay if possible.
- Annually: Review tenure, CPF usage.
- Link budget to property search for affordable homes.
- Avoid maintenance traps: Aircon Services ">aircon services.
- Track CPF: CPF取款限额完整指南：2026年Homejourney房产买家权威解析 ">Withdrawal Limits.
- Consult Homejourney brokers for free.
FAQ: Saving Money on Your Mortgage in Singapore
Q: How much can I save by refinancing in 2026?
A: Up to S$4,100/year on S$500k loan[2]. Use Homejourney calculator for your numbers.
Q: Is fixed or floating better to reduce mortgage costs?
A: Fixed for stability (popular 80%[2]); floating if SORA falls further. Compare both on bank-rates.
Q: When should I use CPF vs cash for mortgage?
A: CPF OA when earning > loan rate. Details: CPF OA vs现金还房贷哪个更划算？Homejourney权威指南 ">OA vs Cash Guide.
Q: What's the best mortgage tenure to cut interest costs?
A: Shortest affordable—saves S$60k+ vs 30 years (see table above).
Q: How does SORA affect my home loan payment?
A: Most floating loans = SORA + spread. Track live on Homejourney.
Q: Can I prepay without penalty?
A: Yes, up to 20-40% yearly penalty-free at DBS/OCBC[2].
Q: HDB vs bank loan—which saves more?
A: Banks now lower (1.4% vs 2.6%)[1]. Switch if eligible.
Q: How to negotiate lower rates?
A: Show competing Homejourney quotes—gains 0.1-0.3%.
Q: What's TDSR and mortgage savings impact?
A: Caps at 55% income; plan buffer for rate rises.
Q: Best banks for mortgage savings 2026?
A: DBS, OCBC, UOB lead promotions[1][2]. Compare all on Homejourney.
Next Steps: Start Saving with Homejourney Today
Secure your mortgage savings tips journey. Visit https://www.homejourney.sg/bank-rates to compare rates, calculate savings, and apply seamlessly. Our verified tools ensure transparency and safety—your trusted partner for save money mortgage success.
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