Hidden Refinancing Costs in Singapore: Homejourney Break-even Guide

Refinancing your home loan in Singapore is only worth it if the interest savings you get before you sell or fully repay your loan are greater than all the visible and hidden refinancing costs, including legal fees, valuation, lock-in penalties, subsidy clawbacks, admin charges, and even your time and risk of changing packages.

This cluster guide zooms into the Hidden Costs of Calculating if Refinancing is Worth It Complete You Need to Know, and complements Homejourney’s main refinancing pillar guide: Is Refinancing Worth It? Complete Singapore Guide | Homejourney . It is written for Singapore homeowners who want a clear, numbers-based way to answer: “Should I refinance?”

Refinancing vs Repricing: Why Hidden Costs Matter

In Singapore, you usually have two options when your fixed or promotional rate ends: refinancing (switching to another bank) or repricing (changing package within the same bank). Refinancing typically offers more choices and sometimes lower rates, but comes with more potential hidden costs like legal, valuation, and lock-in penalties.[1][2]

Repricing, on the other hand, rarely incurs legal or valuation fees but may come with a smaller interest rate reduction and an admin or conversion fee, commonly around a few hundred dollars.[2][3] For example, in a typical 4-room HDB in Punggol with a remaining loan of S$350,000, repricing might save you slightly less per month than refinancing, but avoid several thousand dollars in clawbacks or penalties if you are mid-lock-in.

Because of this trade-off, Homejourney always recommends calculating your refinance break-even after including all costs, not just what the banker highlights. If repricing is cheaper and safer once hidden costs are added, that is often the smarter move.

Key Hidden Refinancing Costs in Singapore

Most marketing materials focus on the new interest rate, but safe decision-making requires you to list out every dollar that leaves your pocket or may be clawed back if you switch.

1. Legal Fees

When you refinance in Singapore, a law firm has to discharge your old mortgage and register the new one. Typical legal fees range from about S$2,000–S$3,000 depending on property type and loan size.[1][5] Many banks offer legal subsidies, but they often come with conditions such as minimum loan amount or clawback if you refinance again within 3 years.[3][5]

Example from the ground: for a S$900,000 condo loan in Sengkang I’ve seen legal fees quoted at around S$2,600, with the new bank subsidising S$2,000 and the rest paid in cash. If the owner refinanced again within 3 years, the original subsidy of S$2,000 would be clawed back, turning into a hidden cost.

2. Valuation Fees

Your new bank will usually require a fresh valuation to fix your loan-to-value (LTV). For HDB flats, expect roughly S$150–S$300; for condos and landed, S$300–S$800 is common depending on value and complexity.[1][5] In practice, I’ve seen HDB valuations around S$200–S$250 and OCR condos around S$400–S$600.

Many banks subsidise all or part of the valuation fee if your remaining loan meets their minimum threshold (commonly S$300,000 for HDB and S$400,000–S$500,000 for private property).[1][5] The hidden cost arises when your loan is smaller or you later trigger a subsidy clawback, making the initial “free” valuation effectively paid for.

3. Lock-in Penalties & Prepayment Charges

If you refinance during your lock-in period, most banks in Singapore charge a penalty of around 1–1.5% of the outstanding loan.[1][3][4] For a S$600,000 loan, 1.5% is S$9,000 – this alone can wipe out years of savings from a slightly lower rate.

Beyond the obvious lock-in, check for:

Partial prepayment penalties: Some packages charge 0.5–2% if you reduce your principal beyond a certain limit during the lock-in.[3]
Interest reset date penalties: Certain floating packages only allow full redemption on interest reset dates; refinancing outside that window can trigger extra fees of 0.5–2%.[3]

4. Subsidy Clawbacks

Many homeowners overlook subsidy clawbacks. If your current bank gave you legal or valuation subsidies or a cash rebate at the start, there is often a clause requiring you to stay at least 3 years, or you must repay all or part of those subsidies.[3][4]

Clawbacks for private condos in areas like Bukit Timah or Tanjong Rhu can easily be S$2,000–S$5,000 depending on your original package.[3][5] If you refinance after only 18–24 months to chase a slightly lower SORA spread, this clawback is a real, immediate cash outflow that must go into your refinance calculator.

5. Admin, Conversion & Cancellation Fees

Smaller but still important hidden costs include:

Conversion / repricing fee with your current bank (often S$200–S$800, sometimes higher for premium packages).[3]
Cancellation fees on undisbursed loans, commonly about 1% of the undisbursed amount with minimum S$1,000, especially for new launch properties at T.O.P.[4]
Miscellaneous bank admin fees such as fire insurance adjustments or late payment penalties if the switch is not well-timed.

6. Time, Effort and Risk Costs (Often Ignored)

From a practical standpoint, there are also non-monetary costs:

Time spent meeting multiple bankers, signing documents, visiting branches.
Risk of mis-timing the switch and ending up with a higher floating rate if markets move unexpectedly.
Stress of dealing with legal paperwork, especially if you have an ongoing renovation or tenancy.

Homejourney helps reduce these friction costs by letting you compare refinancing rates from DBS, OCBC, UOB, HSBC, Standard Chartered and more on one page, and submit a single application to multiple banks via Singpass: Bank Rates .

How to Calculate Your Refinance Break-even (Step-by-step)

To decide if refinancing is worth it, you need to compute a refinance break-even: the point in months when your cumulative savings from the new rate exceed all costs.

Step 1: List All Refinancing Costs

Include:

Legal fees (minus any subsidies, but include potential clawbacks)
Valuation fees (minus subsidies)
Lock-in or prepayment penalties from your existing bank, if applicable
Cancellation or admin fees
Any clawback of previous subsidies or rebates

Add them up to get Total Refinancing Costs (C).

Step 2: Calculate Monthly Savings from the New Rate

Using your existing loan balance, tenure and rate, calculate your current monthly instalment, then do the same for the new package. The difference is your monthly savings (S).

You can do this manually using amortisation formulas, but the easiest way is to use Homejourney’s refinance calculator on the bank rates page: Mortgage Rates or .