Hidden Costs of Mortgage Refinancing You Need to Know

Hidden costs of mortgage refinancing in Singapore can add up to S$3,000 or more, including legal fees (S$1,800–S$3,000), valuation fees (S$350–S$900), and potential early redemption penalties up to 1.5% of your remaining loan if within lock-in periods.[1][2][3]

These expenses often catch homeowners off guard, potentially wiping out interest savings from lower rates. Homejourney prioritizes transparency to help you make safe, informed decisions on mortgage refinancing Singapore. This cluster article dives deep into these costs, linking back to our comprehensive Mortgage Refinancing Singapore 2026: Homejourney Ultimate Guide pillar for full coverage.

Refinancing vs Repricing: Key Differences and Costs

Understanding repricing vs refinancing is crucial before diving into costs. Repricing stays with your current bank, switching packages for a fee of S$800–S$1,000, avoiding legal work but often yielding worse rates than new-to-bank offers.[2][3]

Refinancing switches banks for better rates but incurs higher upfront costs. Banks like DBS, OCBC, UOB, HSBC, and Standard Chartered often subsidize these to attract you—up to full coverage for loans over S$300K (HDB) or S$400K (private).[1][2]

Repricing costs: Admin fee ~S$800, no legal/valuation fees.
Refinancing costs: Legal S$1,800–S$3,000 (often subsidized S$1,800–S$3,000), valuation S$350–S$900 (up to 100% subsidized).[1][3]

Pro tip: Use Homejourney's bank-rates page to compare DBS, OCBC, UOB rates instantly and spot subsidy offers.

Breakdown of Major Hidden Costs

Legal fees cover conveyancing and title transfers when moving banks. Expect S$1,800–S$3,000, but banks like Maybank or CIMB frequently offer full subsidies in promotions.[1]

Valuation fees assess your property's current value—higher for private condos (S$500–S$900) vs HDB flats (S$350). Subsidies cover 80–100%, reducing your outlay to near zero for qualifying loans.[1][2]

Other hidden traps:

Lock-in clawback: 1–1.5% of remaining loan if refinancing early (e.g., S$15,000 on S$1M loan).[3][5]
Admin/processing fees: S$200–S$500 per bank.
TOP cancellation: 1% on undisbursed loan (~S$1,000 min) if refinancing pre-TOP.[5]
Fire insurance: Sometimes required anew, S$200–S$500/year.

Real example: A Punggol HDB owner with S$800K loan refinanced from 2.6% HDB rate to 1.8% bank loan, saving S$237/month but paying S$500 net after subsidies—break-even in 2 years.[1][10]

SORA Rates and Timing Your Refinance

SORA (Singapore Overnight Rate Average) benchmarks most floating loans. With 3M SORA at 1.3–1.4% end-2025, refinancing momentum continues into 2026 as bank loans beat HDB's 2.6%.[8][10]

The chart below shows recent interest rate trends in Singapore:

As seen, rates dipped, making now ideal for when to refinance post-lock-in. Avoid if savings don't exceed costs within 2–3 years.

How to Calculate If Refinancing Is Worth It

Follow this refinancing guide to assess costs vs savings:

Compute monthly savings: New rate minus old (e.g., 2.5% to 1.8% on S$1M/25yrs = S$237/month).[1]
Add total costs: Net fees after subsidies (e.g., S$500–S$2,500).[2]
Break-even point: Costs ÷ monthly savings (e.g., S$2,000 ÷ S$237 = 8 months).
Project net gain: (Savings × remaining tenure) – costs (e.g., S$28,440 over 10yrs).[1]

Try Homejourney's calculator at bank-rates#calculator. For HDB upgraders, factor TDSR limits—refinance only if equity grows value.

Insider tip: Time post-lock-in (2–3yrs typical) and negotiate subsidies. Banks compete via Homejourney's multi-bank submission—apply once via Singpass for offers from DBS to RHB.

Actionable Tips to Minimize Hidden Costs

Negotiate packages: Demand full legal/valuation subsidies plus cashback (S$500+).[1] Compare via Homejourney bank-rates for real-time SORA tracking.

Check lock-in expiry 3–6 months ahead.
Submit to multiple banks simultaneously on Homejourney—no branch visits.
Bundle with goals like renovations; access equity without selling.
Consult Homejourney mortgage brokers for personalized advice (free via application).

Disclaimer: Rates fluctuate; this is not financial advice. Verify with MAS/HDB guidelines and professionals. Homejourney verifies data for your safety.

FAQ: Hidden Costs of Mortgage Refinancing

What are the typical hidden costs of refinancing in Singapore?
Legal fees (S$1,800–S$3,000, often subsidized), valuation (S$350–S$900), and lock-in penalties (1.5%). Net cost usually under S$1,000 with promotions.[1][2]

Is refinancing cheaper than repricing?
Yes for loans >S$300K—refinancing subsidies beat repricing's S$800 fee, especially with better rates.[2][3]

When should I refinance my home loan?
Post-lock-in, when rate drop >0.5%, and break-even <2yrs. Track SORA on Homejourney.[8]

Do banks subsidize refinancing fees?
Yes, DBS/OCBC/UOB often cover 100% legal/valuation for qualifying loans. Compare on Homejourney.[1]

How long does refinancing take?
4–8 weeks: application, valuation, legal. Faster via Homejourney Singpass integration.

Armed with this knowledge on hidden costs of mortgage refinancing you need to know, explore savings securely on Homejourney. Compare refinance home loan rates now, calculate eligibility, and let banks bid for you. For full details, read our pillar: Mortgage Refinancing Singapore 2026 Ultimate Guide. Your trusted partner for safe property decisions.