The Hidden Costs of Best Banks for Mortgage Refinancing You Need to Know in Singapore usually come from legal and valuation fees, lock-in and clawback penalties, conditions attached to cash rebates or subsidies, and small interest-rate nuances that only show up in long-term calculations.
These costs can easily wipe out the savings you thought you were getting from the “best bank refinance Singapore” offers if you don’t analyse them carefully.
This cluster article sits under Homejourney’s main refinancing pillar guide – Best Banks for Mortgage Refinancing in Singapore 2026 | Homejourney Guide Best Banks for Mortgage Refinancing in Singapore 2026 | Homejourney Guide – and zooms in specifically on hidden costs when comparing refinancing rates across DBS, OCBC, UOB and other top banks.
Refinancing vs Repricing: Where Hidden Costs Show Up
Before you even compare refinancing rates, you need to understand the difference between refinancing and repricing, because the hidden costs are different for each.
Refinancing means moving your home loan from one bank to another (for example, from DBS to OCBC, or from UOB to HSBC). According to bank guides, this usually involves:
[3]
- Legal fees for transferring the mortgage title – typically around S$1,800–S$3,000[1][3]
- Valuation fees to assess your property’s market value – about S$350–S$900, often higher for condos and landed homes[1][2]
- Possible early redemption (lock‑in) penalties of about 1.5% of your outstanding loan if you exit during the lock‑in period[2][3]
Repricing means switching to a new package with the same bank. You avoid legal and valuation fees, but most banks charge a conversion or admin fee of about S$800 (sometimes more for certain packages).[2][3]
In practice, most owners in mature estates like Tampines, Bishan or Queenstown start shopping for refinancing about 3–6 months before their lock‑in ends, because banks usually let you lock in a new rate in advance. Locals know that if you wait until your current package rolls to the “board rate”, you can easily end up paying more than 1% extra per year – that alone can cost you S$300–S$400 a month on a S$700,000 loan.
For a detailed comparison framework, you can also read: Refinancing vs Repricing in Singapore: How Homejourney Helps You Decide Refinancing vs Repricing in Singapore: How Homejourney Helps You Decide and Refinancing vs Repricing: Which is Better for You? Refinancing vs Repricing: Which is Better for You? | Homejourney .
Key Hidden Costs When Choosing the “Best Bank Refinance”
Most marketing highlights low headline rates and generous subsidies, but the real cost of refinancing often lies in the fine print. Here are the main hidden costs to watch for when comparing top banks refinancing packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank.
1. Legal and Valuation Fees vs Subsidies
On paper, many “best bank refinance Singapore” packages look similar: interest rates around the same level plus “up to S$2,000 legal subsidy” or “full valuation subsidy”.
In reality, the details matter:
- Legal fees: Typically S$1,800–S$3,000 for standard HDB or condo cases, sometimes more for complex ownership structures or trust purchases.[1][3]
- Valuation fees: Around S$350–S$900, with larger landed homes or premium condos like those in District 9–11 sometimes at the higher end.[1][2]
- Subsidies: Banks may cover all or part of these fees, but only if you meet minimum loan amounts (e.g. ≥S$300,000 for HDB, ≥S$400,000 for private property).[2]
The hidden cost: If your remaining loan is small – which is common for older HDB flats in Bedok, Ang Mo Kio or Clementi with under S$250,000 outstanding – you might not qualify for full subsidies. You then pay legal and valuation fees out of pocket, shrinking or even erasing your expected savings.
According to DBS’ own example, legal & valuation fees can be S$3,000 or more for refinancing a HDB flat.[3] Another independent analysis shows typical subsidies in the range of S$1,800–S$3,000 for legal and up to 100% coverage for valuation.[1]
Homejourney tip: Use the Homejourney refinancing calculator at Bank Rates and Mortgage Rates to input your estimated legal and valuation fees (and whether they are fully or partially subsidised). This gives you a more realistic net savings figure instead of just looking at the headline rate.
2. Lock‑In Periods and Early Redemption (Clawback) Penalties
Most attractive refinance offers from DBS, OCBC, UOB and other banks come with a lock‑in period of 2–3 years. The hidden costs here are twofold:
- Early redemption penalty: About 1.5% of your outstanding loan if you redeem (refinance or sell) during the lock‑in period.[2][3]
- Clawback of subsidies/cash rebates: If you exit within a specified period (often 3 years), the bank can claw back the legal subsidy and cash rebate paid to you.
For example, if you refinance a S$800,000 loan to a bank with a 3‑year lock‑in, then sell your condo in Punggol after 18 months because you’re upgrading to a landed home in Serangoon Gardens, you could face:
- Early redemption penalty: 1.5% × S$780,000 ≈ S$11,700
- Subsidy clawback: say S$2,000 legal subsidy + S$1,000 cash rebate = S$3,000
Total hidden cost: about S$14,700 – enough to offset years of interest savings.
For ongoing investment property owners, see Hidden Costs of Refinancing for Investment Property Owners | Homejourney Hidden Costs of Refinancing for Investment Property Owners | Homejourney and Refinancing Investment Properties: Complete Guide for Singapore Owners Refinancing Investment Properties: Complete Guide for Singapore Owners .
3. Cash Rebates that “Look Free” but Aren’t
Many banks, especially when competing hard for market share, offer cash rebates for refinancing – for example, S$2,000–S$3,000 credited to your account after loan disbursement.[1][4]
The hidden costs behind these attractive rebates include:
- A longer clawback period (often 3 years) where you must stay with the bank or repay the rebate
- Slightly higher interest rates than packages without rebates
- Conditions such as maintaining salary crediting or credit card spending to keep preferential rates
If you look at two packages on Homejourney’s refinance offers listing, you may see:
- Package A: 3M SORA + 0.80%, no cash rebate
- Package B: 3M SORA + 0.95%, S$2,000 cash rebate
On a S$700,000 loan over 25 years, that 0.15% difference can easily exceed S$2,000 in extra interest over a few years, meaning the “free” rebate is not actually free.
4. Small Rate Differences That Add Up Over Time
Borrowers often focus on the bank with the lowest first‑year rate, but overlook how the rate changes after the initial period. For example, some banks move from a promotional 2‑year fixed rate to a higher spread over SORA after year 3.
According to MAS and local news analysis, 3M SORA has been trading at multi‑year lows into 2026, but future movements remain uncertain.[7][8] A 0.10–0.20% difference in spread between banks can result in thousands of dollars in cumulative interest over 10–15 years.
This is one of the most common “invisible” costs: Homeowners choose a bank based on a small cash rebate but ignore the slightly higher spread. The total interest over time can be significantly higher.
Homejourney tip: Use our affordability and refinancing tools at to model your monthly instalments and total interest over the remaining tenure, not just the first two or three years.
Understanding SORA, Rate Types and Timing Your Refinance
Most DBS, OCBC, UOB refinance packages today are pegged to SORA (Singapore Overnight Rate Average), the MAS-backed benchmark replacing SIBOR.[7][8] Packages can be:
- Pure floating: 3M or 6M SORA + a fixed spread
- Fixed‑then‑floating: e.g. 2‑year fixed, then SORA + spread
- Board rate / internal rate: usually less transparent and potentially higher over time
The chart below shows recent interest rate trends in Singapore:
From a local homeowner’s perspective, the SORA environment in 2025–2026 has felt much more comfortable compared with the sharp spikes after 2022, with many owners in estates like Sengkang and Jurong deciding to refinance back into SORA‑pegged packages as rates softened.[7][8]
However, a key hidden cost is timing: Refinancing too early (inside your lock‑in) can trigger penalties, while waiting too long can leave you paying a high reversion rate for months. Banks typically allow you to secure a new package 3–6 months in advance of your current term expiry.
Homejourney tip: Track real‑time 3M and 6M SORA on Homejourney’s platform at Bank Rates . Our tools let you see live rates and estimate how rate changes impact your instalments, so you can better time your move.
How to Calculate If Refinancing Really Saves You Money
To uncover hidden costs, you should always run a break‑even analysis. In simple terms:
Break‑even period = Total refinancing costs ÷ Monthly savings
Refinancing costs include:
- Legal and valuation fees (minus subsidies)
- Any clawback of previous subsidies if applicable
- Early redemption penalty (if refinancing during lock‑in)
- Miscellaneous bank admin fees
Example (realistic HDB case in Pasir Ris):
- Outstanding loan: S$420,000
- Remaining tenure: 20 years
- Current rate: 3.10% p.a.
- New refinancing rate: 2.40% p.a. (average among top banks refinancing packages)
Monthly instalment at 3.10%: about S$2,341
Monthly instalment at 2.40%: about S$2,219
Monthly savings ≈ S$122
Assume:
- Legal + valuation fees: S$2,700
- Bank subsidy: S$2,000 (legal), S$300 (valuation)
Net cost ≈ S$400. Break‑even period = S$400 ÷ S$122 ≈ 3–4 months. In this case, refinancing is clearly worthwhile if you expect to hold the flat for at least another 2–3 years.
If your net cost was S$3,000 and monthly savings only S$80, your break‑even period would be about 37 months – risky if you plan to sell or upgrade soon.
For more worked examples, see How to Calculate If Refinancing is Worth It | Homejourney How to Calculate If Refinancing is Worth It | Homejourney .
Practical Step‑by‑Step: Refinancing Safely with Fewer Surprises
Based on real cases Homejourney sees from owners in areas like Punggol, Bukit Panjang and Tanjong Pagar, this step‑by‑step approach helps you avoid most hidden costs.
- Check your current loan terms
Log into your existing bank’s portal or call the mortgage team to confirm:
- Remaining lock‑in period and any early redemption penalties
- Current interest rate and reversion (after promo period)
- Existing legal subsidies and clawback period
If you’re still in lock‑in, get an exact penalty quote. This is a crucial input in your Homejourney calculator. - Assess your holding period
Think realistically: Are you likely to sell or upgrade (e.g. from a 4‑room HDB in Yishun to a condo in Hougang) within 3–5 years?
- If yes, avoid long lock‑ins and heavy clawback conditions
- If no, you can consider slightly longer lock‑ins in exchange for better rates - Compare refinancing rates across multiple banks
Instead of visiting DBS in Raffles Place, OCBC at Tampines Hub and UOB in Jurong Point one by one, you can:
- Use Homejourney’s bank rates comparison at Bank Rates to view packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank in one place
- Compare fixed vs floating, SORA spreads, subsidies and lock‑in terms side by side
- Shortlist 2–3 packages with the best overall value, not just the lowest headline rate - Run detailed calculations
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