Homejourney Guide: Is Refinancing Worth It? Complete Calculator
Refinancing your home loan in Singapore can save you thousands, but only if calculated correctly. This definitive Homejourney guide shows you how to determine if refinancing is worth it using break-even analysis, real costs, and a step-by-step refinance calculator approach tailored for HDB and private property owners.[1][2]
Homejourney prioritizes your safety and trust by verifying rates from all major banks like DBS, OCBC, UOB, and more. Compare refinancing rates instantly on our bank rates page and submit one application to multiple banks for the best offers.
Table of Contents
- Executive Summary
- 1. Refinancing Fundamentals in Singapore
- 2. When Is Refinancing Worth It?
- 3. Break-Even Calculation: The Refinance Calculator Formula
- 4. All Refinancing Costs in Singapore (2025 Breakdown)
- 5. Real Singapore Examples: Is Refinancing Worth It?
- 6. Timing Your Refinance: Lock-In Periods & SORA Trends
- 7. Step-by-Step Guide to Refinancing
- 8. Money-Saving Strategies & Negotiation Tips
- 9. How Homejourney Makes Refinancing Safe & Simple
- FAQ: Should I Refinance My Home Loan?
- Next Steps with Homejourney
Executive Summary: Calculate If Refinancing Is Worth It
Refinancing is worth it if your monthly savings exceed total costs within 2-3 years (break-even period). For a S$500,000 HDB loan at 3.5% dropping to 2.8% SORA + 0.5%, you could save S$200/month after S$5,000 costs—breaking even in 25 months.[1][5]
Key takeaway: Use Homejourney's real-time tools to run a personalized refinance calculator. We integrate MyInfo via Singpass for instant eligibility checks, ensuring a trusted process.[2][3]
Current 2025 rates: 1M SORA ~2.8%, bank packages from 2.98% (Year 1).[2][5] Always factor MSR (30%) and LTV (75% for HDB refinance).[1]
1. Refinancing Fundamentals in Singapore
Refinancing means replacing your existing home loan with a new one from the same or different bank for better rates or terms. Unlike HDB's fixed 2.6% CPF housing rate, bank loans tie to SORA (Singapore Overnight Rate Average), now at ~2.8% compounded.[1][5]
Repricing vs Refinancing: Repricing adjusts rates with your current bank (no fees, but limited options). Refinancing switches banks, unlocking promotions like UOB's S$2,000 cash for S$450k loans.[2]
HDB vs Private Property Refinancing
HDB loans can't revert to board rate post-refinance; LTV caps at 75%, MSR at 30%.[1] Private properties allow up to 75% LTV too, but ECs follow HDB rules pre-MOP.[1]
Insider tip: For HDB in mature estates like Toa Payoh, banks value higher due to location—boosting your LTV.[1]
Eligibility Basics
- MOP: 5 years for HDB flats.
- Lock-in: 2-3 years typical; penalties 1.5% if broken.[1][5]
- Credit Score: Above 700 ideal for best rates.
- TDSR: 55% of income max for all debts.[1]
2. When Is Refinancing Worth It?
Refinancing makes sense if rate drop >0.5%, remaining tenure >10 years, and break-even <36 months. With SORA stable at 2.8% in 2025, packages like OCBC's 1M SORA +0.98% (Year 1) beat HDB's 2.6% +1.6% spread.[5][1]
Ask: Should I refinance? Yes, if savings cover costs quickly. No, if lock-in penalties exceed benefits or rates rise.[1]
3. Break-Even Calculation: The Refinance Calculator Formula
Break-even months = Total Refinancing Costs / Monthly Savings. This is your refinance calculator core.[3][4]
Example: Costs S$4,000, savings S$150/month → 27 months break-even.
| Input | Formula | Example |
|---|---|---|
| Current Rate | - | 3.5% |
| New Rate | - | 2.8% |
| Loan Amount | - | S$500,000 |
| Tenure | - | 25 years |
| Monthly Savings | New Payment - Old Payment | S$150 |
| Total Costs | Fees + Penalties | S$4,000 |
| Break-Even | Costs / Savings | 27 months |
Use online tools like Citibank's refinance calculator for precision.[3] Homejourney's bank rates page includes a built-in version.
4. All Refinancing Costs in Singapore (2025 Breakdown)
Total costs average S$3,000-S$10,000, including hidden fees. Factor these into your refinancing costs analysis.[1]
| Cost Type | HDB Estimate | Private Estimate | Notes |
|---|---|---|---|
| Valuation Fee | S$500-S$1,000 | S$800-S$1,500 | Bank-required.[1] |
| Legal Fees | S$2,000-S$3,000 | S$2,500-S$4,000 | Conveyancing.[1] |
| Lock-in Penalty | 1.5% of loan | 1-1.5% | If within period.[5] |
| Clawback | Up to 1.5% | Up to 1.5% | Promotion refund.[2] |
| Processing Fee | S$200-S$500 | S$300-S$1,000 | Per bank.[5] |
| Total | S$4,000-S$8,000 | S$5,000-S$10,000 | - |
Pro tip: Negotiate waiver of processing fees—Homejourney experts help via WhatsApp.
5. Real Singapore Examples: Is Refinancing Worth It?
HDB Example (Tampines 4-room flat): S$600k valuation, S$450k outstanding at 3.2%. Refinance to DBS 3M SORA +0.7% (Year 2: ~3.5% total). Savings S$220/month, costs S$5,500 → break-even 25 months. Net save S$26,000 over 10 years.[1][2]
Private Condo (Punggol Edge): S$1.2M loan at 3.8% to OCBC 1M SORA +0.98% (~3.78% Y1). UOB cash S$2,500 offsets costs. Break-even 18 months.[2][5]
6. Timing Your Refinance: Lock-In Periods & SORA Trends
Best time: 3-6 months before lock-in ends. Monitor SORA via Homejourney's real-time tracker—2025 forecast stable at 2.8-3.2%.[5]
- Lock-in ends: Refinance immediately for no penalty.
- SORA dips: Lock fixed rates (OCBC 2Y fixed).[5]
- Year-end promos: Cash rebates peak (e.g., S$2,800 OCBC).[5]
Reference Straits Times for market updates.
7. Step-by-Step Guide to Refinancing
- Check Eligibility: MOP met? Credit score? Use CPF calculator.[8]
- Compare Rates: Homejourney bank rates for DBS, UOB, etc.[2][5]
- Calculate Break-Even: Input to refinance calculator.[3]
- Apply Multi-Bank: One form on Homejourney—MyInfo auto-fill.
- Valuation & LO: 2-4 weeks.[1]
- Lawyer & Disbursement: 6-8 weeks total process ~13 weeks.[1]
- Complete: New loan pays old.
Documents: 3 months payslips, CPF statements.[1]
8. Money-Saving Strategies & Negotiation Tips
- Negotiate: Pit OCBC vs UOB offers for better spread.[2][5]
- Cash Rebates: S$2,500+ for S$1M loans.[2]
- Bundle: Refinance + credit card for extra perks.
- Shorten Tenure: Save interest long-term.
- Avoid Clawback: Stay 2+ years.
Combine with property upgrades—search via Homejourney search.
9. How Homejourney Makes Refinancing Safe & Simple
Homejourney verifies all data for trust. Features:
- Compare rates from 11 banks real-time.
- Multi-bank apps: One submission, multiple offers.
- SORA tracker: Time perfectly.
- WhatsApp support: Personalized advice.
Post-refinance, maintain value with aircon services.
FAQ: Should I Refinance My Home Loan?
Q: What is refinance break-even?
A: Months to recover costs via savings. Formula: Costs / Monthly Savings.[3][10]
Q: Refinancing costs Singapore 2025?
A: S$4k-S$10k incl. legal S$2-4k, valuation S$500-1.5k.[1]
Q: Is refinancing worth it HDB?
A: Yes if >0.5% drop, break-even <3 years. Can't revert to HDB loan.[1]
Q: Best refinance rates 2025?
A: 1M SORA +0.98% OCBC Y1; check Homejourney.[5]
Q: How long does refinancing take?
A: ~13 weeks.[1]
Q: Can I refinance during lock-in?
A: Yes, but pay 1.5% penalty.[5]
Disclaimer: This is educational; consult professionals. Rates change—verify on Homejourney.
Next Steps with Homejourney
1. Run your refinance calculator on bank rates.
2. Track SORA.
3. Apply securely via MyInfo.
Homejourney ensures safe, transparent refinancing—your trusted partner.
References
- Singapore Property Market Analysis 1 (2025)
- Singapore Property Market Analysis 2 (2025)
- Singapore Property Market Analysis 5 (2025)
- Singapore Property Market Analysis 3 (2025)
- Singapore Property Market Analysis 4 (2025)
- Singapore Property Market Analysis 10 (2025)
- Singapore Property Market Analysis 8 (2025)
