Is Refinancing Worth It? Complete Singapore Guide | Homejourney

Refinancing your home loan in Singapore can save you tens of thousands of dollars – but only if you calculate carefully whether refinancing is really worth it for your specific situation.

This complete Homejourney guide walks you through how to decide if you should refinance, how to calculate your refinance break-even point, what hidden refinancing costs to watch for, and how to use tools like a refinance calculator and real-time SORA tracking to make a safe, informed decision.

As a platform built around user safety and trust, Homejourney focuses on helping you understand the numbers before you sign anything, so banks compete for your business – not the other way round.

Table of Contents

• 1. Refinancing in Singapore: When Is It Worth It?
• 2. Refinancing vs Repricing: Which Is Better?
• 3. How to Calculate If Refinancing Is Worth It
• 4. Refinancing Costs and Hidden Fees in Singapore
• 5. Timing Your Refinance: Lock-In, SORA & Rate Cycles
• 6. Step-by-Step Refinancing Process in Singapore
• 7. Money-Saving Refinancing Strategies
• 8. Real Singapore Examples & Case Studies
• 9. How Homejourney Makes Refinancing Safer and Easier
• 10. Frequently Asked Questions on Refinancing in Singapore

1. Refinancing in Singapore: When Is It Worth It?

Refinancing worth it essentially means this: the interest savings you gain from switching to a new home loan exceed the total costs and effort of refinancing, within a reasonable time frame (usually 1.5–3 years).

In Singapore, most owners start thinking about refinancing when:

• Your lock-in is ending (typically 2–3 years for bank loans).
• Your rate has jumped from a promotional rate (e.g. 1.6% p.a.) to a higher board/SORA + spread rate (e.g. 3.4% p.a.).
• You notice newer packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank or Citibank are significantly lower than what you are paying.
• You want to switch from fixed to floating (SORA-pegged) or vice versa to manage interest rate risk.

From experience working with Singapore borrowers, the most common scenario is an owner in a mature estate HDB (e.g. in Tampines or Ang Mo Kio) whose promotional rate has just expired and sees monthly instalments jump by $300–$600. At that point, asking “Should I refinance?” becomes urgent.

The safe way to answer that question is to:

1. Understand the difference between refinancing and repricing.
2. Use a refinance calculator to compare monthly and total interest savings.
3. Compute your refinance break-even point (how many months before you recover your costs).
4. Check lock-in, clawback and legal/valuation subsidies carefully.

2. Refinancing vs Repricing: Which Is Better?

2.1 Clear Definitions (Singapore Context)

In Singapore, these two terms are often mixed up, but they are very different in practice:

Officially, MAS, HDB and banks do not use special legal terms for “repricing”, but banks commonly market repricing packages to existing borrowers once the lock-in ends.

2.2 When Repricing May Be Better Than Refinancing

From real cases we see at Homejourney, repricing can sometimes be more sensible than full refinancing, especially if:

• Your outstanding loan is relatively small (e.g. under $200,000).
• You are near the end of your tenure (e.g. less than 8–10 years remaining).
• You are risk-averse or prefer minimal paperwork and want to avoid legal/valuation processes.
• Your current bank is willing to match the better rates in the market.

However, if your loan size is still large (for example $600,000 outstanding on a 25-year tenure for a 4-room HDB in Jurong East), the additional effort and cost of refinancing to another bank can often be justified by the interest savings – but only if the maths checks out.

For an in-depth comparison, see our dedicated guide: Refinancing vs Repricing: Which is Better for You? Homejourney Guide .

3. How to Calculate If Refinancing Is Worth It

3.1 The Core Formula (Refinance Break-Even)

The key metric is your refinance break-even point – how many months it takes for your interest savings to cover all the costs of refinancing.

In simplified form:

Break-even (months) = Total Refinancing Costs ÷ Monthly Interest Savings

Where:

• Total Refinancing Costs = legal fees + valuation fees + admin fees − bank subsidies / cash rebates − any existing subsidies you must refund (clawbacks).
• Monthly Interest Savings = old instalment − new instalment (for the same remaining tenure).

3.2 Using a Refinance Calculator (Step-by-Step)

Homejourney’s tools and bank rates comparison make this easier than doing everything manually.

1. Gather details of your current loan:
   • Outstanding loan amount (e.g. from your latest mortgage statement).
   • Remaining tenure (years/months).
   • Current interest rate and type (fixed or SORA-pegged).
   • Lock-in end date and any clawback conditions.
2. Go to Homejourney’s bank rates page: Bank Rates .
3. Compare current refinancing packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank.
4. Shortlist 2–3 loan packages (e.g. a 2-year fixed, a 3M SORA package, and a 3-year fixed) that match your risk profile.
5. Use the refinancing / mortgage calculator here: Mortgage Rates or to see:
   • Your current monthly instalment.
   • Your projected instalment under each shortlisted package.
   • Estimated total interest savings over the remaining tenure.
6. Estimate costs (next section) and plug them into the break-even formula.

Homejourney’s refinance calculator is designed specifically for Singapore borrowers, incorporating local loan tenures, SORA structures and CPF usage rules so your numbers are realistic.

3.3 Quick “Rule-of-Thumb” Check

Before you dive deep into numbers, use these rules-of-thumb that we see working well for Singapore homeowners:

• If your rate difference vs best available packages is less than 0.40–0.50% p.a., refinancing is often not worth the effort unless you have a very large loan (> $1 million).
• If you have less than 5–7 years of tenure remaining, the interest savings shrink quickly; repricing may be sufficient.
• If the break-even point is beyond 36 months and you may sell or fully redeem the loan earlier, refinancing usually doesn’t make sense.

3.4 Example Break-Even Calculation (HDB Flat)

Imagine a couple in their 30s living in a 5-room HDB at Punggol Walk near Waterway Point, with this current loan profile:

• Outstanding loan: $450,000
• Remaining tenure: 25 years
• Current rate: 3.5% p.a. (floating)
• Out of lock-in, no clawback

They find a 2-year fixed package at 2.8% p.a. via Homejourney’s comparison. Using a refinance calculator:

• Current monthly instalment (3.5%, 25 years): ≈ $2,257
• New monthly instalment (2.8%, 25 years): ≈ $2,086
• Monthly savings: ≈ $171

Estimated refinancing costs:

• Legal fees: $2,000 (typical for HDB refinancing, often subsidised).
• Valuation: $300–$400 (varies by flat type and location).
• Admin/other: $200.
• Bank subsidy: assume $2,000 legal subsidy from the new bank.

Total costs ≈ $2,000 + $350 + $200 − $2,000 = $550.

Break-even (months) = $550 ÷ $171 ≈ 3.2 months.

In this example, refinancing is clearly worth it, because they recover their costs in about 3 months and enjoy lower payments for years after.

For more number-heavy scenarios (especially for investors), see How to Calculate If Refinancing is Worth It: Homejourney Guide and Refinancing for Investment Property Owners: Homejourney Guide .

4. Refinancing Costs and Hidden Fees in Singapore

To decide if refinancing is worth it, you must list out all costs – including those not immediately visible in marketing materials.

4.1 Common Refinancing Costs

Actual charges differ across banks and change over time; always check your original loan documents and your bank’s latest terms, and cross-check with authoritative sources like MAS and HDB guidelines where CPF usage is involved.

4.2 Hidden or Overlooked Costs

These items are easy to miss in a quick rate comparison but matter for your “refinancing worth it” analysis:

• Clawback periods – Many banks require you to stay for 3 years to keep legal subsidies and cash rebates. If you refinance or sell earlier, you may need to refund these subsidies.
• Fire insurance and MRTA/MRTA-like products – Some banks bundle or strongly suggest additional protection products; always separate product value from pure mortgage costs.
• CPF refund implications