Refinancing vs Repricing: Understanding the Hidden Costs
When your home loan's lock-in period ends, you face a critical decision: should you refinance to a different bank or reprice with your current lender? While both options can lower your monthly mortgage payments, the hidden costs associated with each choice can significantly impact your actual savings. At Homejourney, we believe in helping you make informed decisions by breaking down every cost involved—so you can choose the option that truly works best for your financial situation.
The difference is straightforward: repricing means switching to a different interest rate package within your current bank, while refinancing means moving your entire home loan to another bank. However, the financial implications of each choice extend far beyond the interest rate itself.
The Cost Breakdown: Repricing vs Refinancing
Repricing Costs
Repricing appears to be the cheaper option upfront. Your existing bank charges a repricing fee of between $300 to $1,000[1][2], depending on the institution. This is purely an administrative fee—no legal work or property valuation is required.
The good news? Many banks waive or heavily discount repricing fees for existing customers[1]. DBS, OCBC, and UOB frequently offer full waivers of repricing fees[2], making repricing virtually free if you negotiate well. This is one of the most significant advantages of staying with your current bank.
Refinancing Costs
Refinancing involves multiple fees that can quickly add up. Without any subsidies or waivers, you'll typically face:
- Legal fees: $1,500-$2,000 for HDB properties; $1,800-$2,000 for private properties[2]. These fees cover conveyancing—the legal process of transferring your property's title deed from your current bank to the new lender.
- Valuation fees: $150-$200 for HDB properties; $150-$700 for private properties[2]. The new bank requires a formal valuation report to assess your property's current market value before approving the refinance.
Without subsidies, refinancing costs typically range from $2,500 total[2]. However, this is where understanding bank eligibility thresholds becomes crucial for your savings calculation.
The Subsidy Game: How to Eliminate Refinancing Costs
Most banks provide full subsidies for refinancing fees if your outstanding loan meets their threshold[2]:
- For HDB properties: Outstanding loan must exceed $200,000[2]
- For private properties: Outstanding loan must exceed $450,000[2]
If you meet these thresholds, refinancing costs become minimal or even free. This dramatically changes the financial equation. However, there's an important catch: the 3-year clawback period[2]. When a bank provides subsidies or cash rebates, you must remain with that bank for 3 years, or you'll repay the full subsidy amount with no proration allowed[2].
This means refinancing with subsidies locks you in for three years—even if you have a "no lock-in" package. For repricing, there's no such clawback restriction, giving you more flexibility to switch again if rates drop further.
Timeline and Convenience Costs
Beyond monetary fees, there are hidden time costs that affect your decision:
Repricing timeline: Takes approximately 1-3 working days for approval[2], with a standard 1-month notice period. You can start enjoying your new lower rate within about 1 month[1]. No law firm visits or property valuations are required—everything is handled by your bank internally.
Refinancing timeline: Requires approximately 13 weeks (3 months)[2] from start to finish. You'll need to visit a law firm to sign documents and be home for the valuer's property inspection[1]. This extended timeline means you'll wait longer to start saving on interest.
For every month of delay, you're paying your old interest rate. If you're moving from 2.8% to 1.6%, that difference compounds quickly. The repricing advantage here is significant—you start saving immediately.
Interest Rate Package Flexibility
Here's a critical hidden cost that many borrowers overlook: repricing limits your package options[2]. When you reprice, your existing bank offers only the packages they're currently promoting to new customers. You cannot choose from packages offered to other banks' customers.
Refinancing gives you complete freedom to select from Fixed Rates, Board Rates, Fixed Deposit Rates, and SORA rates[2] across all major banks. You can compare current market rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and others to find the package that best matches your risk tolerance and financial goals.
For example, if your current bank's best repricing rate is 1.8% but another bank is offering 1.5% with a two-year fixed rate, refinancing costs might be worth it. This is where using Homejourney's bank rates comparison toolBank Rates becomes invaluable—you can instantly compare what each bank is offering without visiting multiple branches.
The Break-Even Analysis: When Refinancing Makes Sense
To determine whether refinancing is worth the costs, you need to calculate your break-even point. Here's the framework:
- Calculate your monthly interest savings: (Current rate - New rate) × Outstanding loan ÷ 12
- Divide total refinancing costs by monthly savings to find break-even months
- Check if you'll remain in that home/bank longer than the break-even period
Example: You have an outstanding loan of $500,000 at 2.8%. A new bank offers 1.6% with $2,000 in net costs (after subsidies). Your monthly savings = (2.8% - 1.6%) × $500,000 ÷ 12 = $5,000. Break-even = $2,000 ÷ $5,000 = 0.4 months. You break even in less than 2 weeks.
However, if you only plan to stay in your property for 6 months before selling, refinancing might not be worthwhile—even with these savings. This is where repricing's flexibility advantage becomes valuable.
Making Your Decision: A Practical Framework
Choose Repricing If:
- Your outstanding loan is below the subsidy threshold ($200k for HDB, $450k for private property)
- You plan to sell or refinance again within 3 years
- Your current bank's repricing offer is competitive with market rates
- You value simplicity and want to avoid the 3-month refinancing process
- You want to maintain flexibility to switch banks again without penalty
Choose Refinancing If:
- Your outstanding loan exceeds the subsidy threshold, making refinancing essentially free
- Another bank's rate is significantly lower (typically 0.3% or more)
- You need specific mortgage features your current bank doesn't offer
- You plan to stay in your property for at least 3+ years (covering the clawback period)
- You want to maximize long-term interest savings with better rate packages
At Homejourney, we recommend using our refinancing calculatorBank Rates to run these numbers before making your decision. You can instantly see which option saves you more based on your specific loan amount, current rate, and new rate options.
Real-World Example: Repricing vs Refinancing Savings
Consider Ms. Denise Chan's actual case from January 2026[4]. She repriced her DBS mortgage to a two-year fixed rate at 1.6%—nearly half her previous 3% rate. This move saves her approximately $500 monthly[4]. With repricing, she avoided all legal and valuation fees and started saving immediately.
However, if Ms. Chan had an outstanding loan of $600,000 and another bank offered 1.5%, refinancing might have saved her an additional $50 monthly ($600,000 × 0.1% ÷ 12). Over 3 years, that's $1,800 more in savings—potentially worth the $2,000 refinancing cost if she planned to stay longer.
The key insight: both options can deliver significant savings. The "best" choice depends on your specific circumstances, not just the interest rate difference.
Avoiding Common Mistakes
Mistake 1: Ignoring the clawback period. If you refinance with subsidies but sell your property within 3 years, you'll lose the entire subsidy benefit. Factor this into your decision if you're considering selling soon.
Mistake 2: Not negotiating repricing fees. Many borrowers pay the full $800-$1,000 repricing fee when their bank would waive it. Always ask your relationship manager about fee waivers—they're common for existing customers with good payment history.
Mistake 3: Comparing only interest rates. A 0.1% rate difference might sound small, but on a $500,000 loan, it's $500 annually. However, if refinancing costs $2,000 and you'll only save $500 yearly, the break-even is 4 years. Make sure the time horizon works for you.
Mistake 4: Overlooking package features. Some banks offer packages with free conversion options, partial repayment without penalty, or waived penalties when you sell. These features have real value beyond the interest rate alone.
Timing Your Decision: Lock-In Period Strategy
You should start your refinancing process 3-6 months before your lock-in period ends[2] to allow adequate processing time. For repricing, 1 month before the lock-in period ends[2] is sufficient given the faster approval timeline.
This timing is crucial because if you miss your window and your lock-in period expires, your bank may automatically convert you to their standard variable rate—which is typically higher than any promotional rate you could negotiate.
At Homejourney, we recommend setting a calendar reminder 6 months before your lock-in period ends. Use this time to compare current rates from major banksBank Rates , run your break-even calculations, and decide whether to refinance or reprice. This proactive approach ensures you never miss an opportunity to save.
How Homejourney Simplifies Your Decision
Making this decision shouldn't require visiting multiple banks or spending hours on calculations. Homejourney's platform helps you:
- Compare rates instantly: See current refinancing rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major banks in one placeBank Rates
- Calculate your break-even: Our refinancing calculator shows exactly how many months until you recover refinancing costs based on your specific loan details
- Submit one application to all banks: Instead of visiting branches individually, submit a single refinancing application and receive offers from multiple banks—letting them compete for your business
- Apply via Singpass: Use MyInfo integration to auto-fill your application in seconds for faster processing
- Track SORA rates: Monitor real-time 3M and 6M SORA rates to time your refinancing decision perfectly
Our mortgage brokers are also available to provide personalized guidance on whether refinancing or repricing makes sense for your specific situation. Apply via our bank rates pageBank Rates to connect with a Homejourney mortgage broker who can walk you through the numbers.
Frequently Asked Questions
Q: Will I have to pay fire insurance again if I refinance?
A: Fire insurance is an ongoing cost that applies regardless of whether you refinance or reprice. The premium is based on your property's reinstatement value, not your lender[2]. You won't pay it twice, but it's a cost to factor into your overall monthly obligations.
Q: Can I negotiate better refinancing rates?
A: Yes. Banks compete for refinancing customers and often offer rate discounts or cash rebates beyond their advertised rates. When you submit your refinancing application through Homejourney, multiple banks will present their best offers—giving you leverage to negotiate. Don't accept the first offer; compare what each bank proposes.
Q: What happens if I refinance but rates drop further in 6 months?
A: If you refinance with a clawback period, you're locked in for 3 years. However, some banks offer packages with free conversion options, allowing you to switch to a lower rate without penalty[2]. When refinancing, specifically ask about conversion features. Repricing offers more flexibility here—you can reprice again after your lock-in period ends without penalty.
Q: Is there a penalty for early repayment?
A: Most modern mortgage packages allow partial repayment without penalty[2]. However, always confirm this with your lender before committing. Some older packages may have restrictions, so review your loan agreement carefully.
