How to Calculate If Refinancing is Worth It | Homejourney

To calculate if refinancing your home loan is worth it, compare your current monthly payment against the new one, subtract refinancing costs (like legal fees and valuation at S$2,000–S$5,000), and divide the monthly savings by the costs to find the break-even period—aim for under 24–36 months for it to be worthwhile.[1][2][4]

Homejourney prioritizes your safety and trust by verifying all loan data and offering transparent tools. This cluster guide builds on our pillar Ultimate Singapore Home Loan Guide, providing tactical steps for property owners and investors deciding on investment property refinance or rental property refinance. Use our free calculator at https://www.homejourney.sg/bank-rates#calculator to crunch your numbers instantly.[3]

Refinancing Fundamentals: Repricing vs Full Refinance

Refinancing means switching your entire loan to a new bank or package, often for better rates or cash-outs. Repricing stays with the same bank but negotiates a lower rate. Choose repricing if outside your lock-in period (typically 2–3 years) to avoid penalties; go for refinancing for promotions like UOB's S$2,000 cash for S$450k+ loans.[1]

For HDB flats, wait out the 5-year Minimum Occupation Period (MOP) before refinancing bank loans, per HDB rules. Private properties have Loan-to-Value (LTV) limits at 75% for refinancing. Homejourney simplifies this—track real-time 3M SORA rates (around 3.0% in late 2025) on our platform to time your move.[2]

Insider tip: For a Toa Payoh HDB resale flat valued at S$600k with S$400k outstanding, refinancing now could save S$200/month if SORA +0.70% packages apply, but check clawback clauses from your old bank.[1][2]

Step-by-Step: How to Calculate If Refinancing is Worth It

Follow these actionable steps to determine savings precisely. Singapore's Total Debt Servicing Ratio (TDSR) at 55% and Mortgage Servicing Ratio (MSR) at 30% for HDB must stay compliant post-refinance.[2]

Gather current loan details: Note monthly payment, interest rate (e.g., 3M SORA +1.5% = ~4.5%), remaining tenure (e.g., 25 years), and outstanding principal (e.g., S$500,000).
Estimate new loan terms: Use Homejourney's tool to compare DBS, OCBC, UOB rates—e.g., OCBC's Year 1: 1M SORA +0.98%.[4] Input new rate, same tenure.
Calculate monthly savings: New payment minus current. Example: Current S$2,800 → New S$2,500 = S$300 savings.
Tally costs: Legal fees (S$2,000–S$3,000), valuation (S$500–S$1,500), processing (S$200–S$500), possible penalties (1–1.5% of loan if in lock-in).[2] Total: ~S$4,000.
Find break-even: Costs ÷ Monthly savings = months to recover (S$4,000 ÷ S$300 = 13 months).
Project total savings: (Monthly savings × remaining months) minus costs. For 25 years: Massive if break-even is short.

Try it on Homejourney: Submit one application via Singpass to DBS, OCBC, UOB, HSBC, and more—receive competing offers without branch visits. Link: https://www.homejourney.sg/bank-rates.

Real Singapore Examples: HDB vs Private Property

HDB Example: S$500k outstanding on 4-room BTO in Punggol (valuation S$650k). Current: SORA +1.8% (S$2,600/month). Refinance to UOB SORA +0.70% Year 1–2: S$2,350/month. Savings: S$250. Costs: S$3,500. Break-even: 14 months. Worth it if staying 5+ years, post-MOP.[1][2]

Private Condo Example (Investment Property Refinance): S$1M loan on Orchard condo (valuation S$1.5M). Current fixed 4.2%. New: OCBC promo SORA +0.98% (S$5,200 → S$4,700). Savings: S$500. Costs: S$5,000 + clawback. Break-even: 10 months. Ideal for investor mortgage or property portfolio refinancing.[4]

Read our related guide: Refinancing for Investment Property Owners: Homejourney Guide for investor-specific tactics.

Hidden Costs and Timing Strategies

Factor clawback (1.5% if prepaid early), shorter lease risks (banks wary under 60 years remaining), and LTV drops for second properties.[2] Time refinancing post-lock-in, when SORA dips—monitor on Homejourney. Negotiate cash rebates: UOB S$2,500 for S$1M+ loans.[1]

For second property loan, ensure TDSR compliance. Combine with goals like topping up CPF OA. Always consult professionals—Homejourney offers WhatsApp support for verified advice.

Disclaimer: This is educational; rates fluctuate (e.g., 3M SORA ~3.0% Dec 2025). Seek personalized advice; Homejourney verifies data for trust.[1][4]

Money-Saving Tips with Homejourney

Compare 10+ banks (Maybank, CIMB, RHB) in one dashboard—spot best rental property refinance deals.
Apply multi-bank via Singpass for instant verification, faster approvals.
Track SORA live; refinance when +spread under 1%.
Bundle with property search on https://www.homejourney.sg/search for upgraders.
Avoid pitfalls: See Hidden Refinancing Costs for SG Investment Property Owners | Homejourney .

Compare repricing vs refinancing: Homejourney: Guide to Refinancing vs Repricing: Which is Better for You . Latest rates: Best Bank Refinancing Rates Comparison 2025 | Homejourney .

FAQ: How to Calculate If Refinancing is Worth It

Q: What's the formula for break-even in refinancing?
A: (Total refinancing costs) ÷ (Monthly payment savings) = Break-even months. Under 24 months is typically worth it for Singapore loans.[3]

Q: Can I refinance my HDB investment property?
A: Yes, post-MOP, if LTV ≤75% and MSR ≤30%. Use Homejourney for bank comparisons.[2]

Q: How much are typical refinancing fees in 2025?
A: S$2k–S$5k total (legal S$2–3k, valuation S$500+). Banks like OCBC waive some.[4]

Q: Is now a good time for property portfolio refinancing?
A: With SORA stable, yes if your rate > SORA +1%. Check Homejourney tracker.

Q: How does Homejourney make refinancing safe?
A: Verified rates, Singpass apps, multi-bank bids—prioritizing your security and transparency.

Ready to calculate your savings? Start with Homejourney's refinancing calculator and bank rates comparison at https://www.homejourney.sg/bank-rates. For full coverage, return to our pillar guide. Trust Homejourney for safe, verified property decisions—your journey starts here.