How to Calculate If Refinancing Is Worth It in Singapore | Homejourney

To calculate if refinancing is worth it in Singapore, you compare your total interest savings from the new loan against your total refinancing costs and work out the break-even point in months. If you expect to keep the property beyond that break-even and the savings are meaningful for your situation, refinancing is usually worth considering.

This guide is a focused part of Homejourney’s full refinancing pillar guide – Is Refinancing Worth It? Complete Singapore Guide | Homejourney Is Refinancing Worth It? Complete Singapore Guide | Homejourney . Here, we go deep into the math and practical steps so you can decide confidently and safely whether refinancing makes sense for your home or investment property.

Refinancing vs Repricing: Know What You Are Calculating

Before calculating if refinancing is worth it, you must be clear whether you are looking at refinancing or repricing – the costs and savings differ.

Refinancing: Switch your home loan from your current bank to a different bank (e.g. from Bank A to DBS, OCBC, UOB, HSBC or Standard Chartered). This usually gives you more package choices but higher one-time costs (legal, valuation, possible clawbacks).
Repricing: Stay with the same bank but switch to a new package internally. This is usually faster and cheaper (often just an admin fee) but may not be the absolute lowest rate in the market.

In Singapore, repricing can sometimes be done for a few hundred dollars, whereas full refinancing may involve a few thousand dollars in fees, partially or fully subsidised by the new bank.[2] When you calculate if refinancing is worth it, always compare it against a realistic repricing option as your baseline. For a deeper comparison, read Refinancing vs Repricing: Which is Better for You? Homejourney Refinancing vs Repricing: Which is Better for You? Homejourney .

Step 1: Gather the Numbers You Need

From experience helping owners in towns like Tampines, Punggol and Clementi review their mortgages, the biggest delay is usually at this step – not knowing the exact current figures. Set aside 30–45 minutes and prepare:

1. Your Current Loan Details

Outstanding loan amount (e.g. S$600,000).
Remaining tenure (e.g. 22 years).
Current interest rate and type (e.g. 3M SORA + 1.00% or fixed 3.60% p.a.).
Lock-in period end date and any prepayment penalties (typically 1.5% of outstanding during lock-in).[1][2]

You can find these in your latest mortgage statement or your original Letter of Offer from the bank. If you stay in an HDB flat in areas like Jurong West or Sengkang and you’re still on the HDB concessionary loan (pegged at 0.1% above CPF OA rate, currently 2.6% p.a.), note that refinancing to a bank loan is a one-way decision – you cannot switch back to HDB later.[10]

2. Indicative New Loan Package

Next, get a realistic new package quote. You can use Homejourney’s bank rate comparison page Bank Rates to see live rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong Bank and Citibank, or request an indicative scenario within minutes.

New interest rate and type (e.g. 2-year fixed 3.20% p.a., or 3M SORA + 0.60%).
Proposed tenure (you can keep the same 22 years or extend/shorten within MAS/HDB limits).[7]
Any cash rebate (common for loans > S$500,000).

3. All Refinancing Costs

This is where many owners underestimate. Typical costs include:

Legal fees: Around S$1,800–S$2,800 for private properties; HDB legal fees are often slightly lower. Many banks offer partial or full legal subsidies above a minimum loan quantum (e.g. S$200,000–S$250,000).[1][2]
Valuation fees: Roughly S$250–S$700 depending on property type and value.
Prepayment/lock-in penalty if you refinance before your lock-in ends (often 1.5% of outstanding loan).[1][2]
Clawback of previous subsidies: If you took up legal subsidies or cash rebates from your current bank, refinancing within a clawback period (often 3 years) may require you to refund them.
Bank admin fees: Usually a few hundred dollars.

For a detailed breakdown of each cost item, see Hidden Refinancing Costs in Singapore: Homejourney Break-even Guide Hidden Refinancing Costs in Singapore: Homejourney Break-even Guide .

Step 2: Calculate Your Monthly Savings

The most intuitive way to see if refinancing is worth it is to compare your current and future monthly instalments.

Example: 4-Room HDB in Punggol

Imagine you bought a 4-room HDB in Punggol around 2018, took a S$600,000 bank loan at a fixed rate, and now you have:

Outstanding loan: S$520,000
Remaining tenure: 23 years
Current rate: 3.70% p.a. (fixed, out of lock-in)

You’re offered a new package on Homejourney at:

New rate: 3M SORA + 0.60% (currently about 3.20% p.a. effective)
Same tenure: 23 years

Using Homejourney’s refinancing calculator on the bank rates page Mortgage Rates , you find:

Current monthly instalment: ≈ S$3,000 (illustrative)
New monthly instalment: ≈ S$2,820
Monthly savings: ≈ S$180

These figures are simplified for illustration and will vary depending on the exact rates when you check. Always run the exact numbers using a calculator like CPF’s mortgage calculator or a bank’s repayment calculator.[7][8]