How to Calculate If Refinancing is Worth It | Homejourney

To calculate if refinancing is worth it, subtract the monthly savings from your new lower interest rate from the total refinancing costs (like legal fees and valuation), then divide to find the break-even period. If this period is shorter than your remaining loan term and you plan to keep the property, refinancing likely saves money. Homejourney makes this easy with our refinancing calculator at https://www.homejourney.sg/bank-rates#calculator.

This cluster article dives into the tactical steps for how to calculate if refinancing is worth it, building on our pillar guide, Homejourney: Guide to Complete Guide to Mortgage Refinancing Singapore 2026 . As Singapore's trusted platform prioritizing user safety and transparency, Homejourney verifies rates from DBS, OCBC, UOB, and more to help you decide confidently.[1][2][5]

Refinancing vs Repricing: Key Differences in Singapore

Mortgage refinancing Singapore means switching your entire home loan to a new bank for better rates or terms, while repricing stays with your current bank for a lower rate. Refinancing suits bigger rate drops (e.g., from 3% to 1.5%), but involves costs like S$2,000-3,000 in legal fees and valuation. Repricing is cheaper (often free) but offers smaller savings.[2][5]

For HDB owners in areas like Punggol or private property buyers in Orchard, refinancing shines when new banks like UOB offer S$2,000 cash rebates for loans over S$450,000.[1] Check our detailed comparison in Refinancing vs Repricing: Which is Better for You? | Homejourney .

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

Follow these actionable steps to run your own refinance home loan analysis. Use real 2026 rates from Homejourney's comparison tool at https://www.homejourney.sg/bank-rates, featuring DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, and Citibank.[1][2][5]

Gather your current loan details: Note monthly payment, interest rate, remaining balance, and lock-in period. Example: S$800,000 balance at 2.5% fixed, S$4,000/month payment (25 years left).
Find new rates: Compare on Homejourney – e.g., UOB Year 1: 3M SORA + 0.70% (~1.8% total), cash rebate S$2,000 for S$450k+.[1]
Calculate monthly savings: New payment at 1.8% = ~S$3,700/month. Savings: S$300/month.
Tally costs: Legal fees S$1,500-2,500, valuation S$500-1,000, possible clawback 1.5% if breaking lock-in. Total: ~S$4,000. See hidden costs in Hidden Costs of Mortgage Refinancing You Need to Know | Homejourney .
Compute break-even: Costs ÷ Savings = S$4,000 ÷ S$300 = 13 months. If >13 months on loan, proceed.
Factor rebates: Subtract UOB's S$2,000 rebate: Net cost S$2,000, break-even 7 months.

This method, backed by Citibank and DBS calculators, ensures accuracy.[3][8] Homejourney's tool automates it with Singpass for instant verification.

Understanding SORA and Current Rates for Refinancing

SORA (Singapore Overnight Rate Average), published by MAS, is Singapore's key benchmark since 2024, replacing SOR. Most loans are 3M Compounded SORA + margin (e.g., OCBC Year 1: +0.98%, ~2.5% total).[5]

The chart below shows recent interest rate trends in Singapore:

As seen, SORA has stabilized around 2.8-3.0% in late 2025, making fixed-rate refinancing attractive if rates drop. Track live on Homejourney.[2]

Real Singapore Example: Is Refinancing Worth It?

Meet Alex, HDB owner in Bedok with S$500,000 loan at 3.2% (S$2,500/month, 20 years left). He spots Maybank at 1.5% fixed Year 1 (S$2,200/month, S$300 savings).[2]

Costs: S$2,200 legal + S$800 valuation + S$1,500 clawback = S$4,500.
Rebate: S$2,300 from Maybank.[2]
Net cost: S$2,200. Break-even: 7 months.
Total savings over 20 years: ~S$70,000 interest.

Alex saves big. Run yours on Homejourney – submit one application to all banks via Singpass for competing offers.

When to Refinance: Timing and Eligibility

When to refinance: 6-12 months before lock-in ends, or if rates fall 0.5%+. Avoid if selling soon (waivers rare).[2] Eligibility: Min S$200k HDB/S$300k private, age 21+.[5]

Best now (2026): With SORA steady, fixed packages from DBS/HSBC beat floating. Negotiate via Homejourney brokers for extra 0.05% off.

Hidden Costs and Money-Saving Tips

Beyond basics: Processing fees S$200, discharge fee S$200. Total often S$3,000-5,000. Tips: Choose banks with full subsidies (e.g., S$2,800 for S$1.5m+ loans).[2] Combine with Eco-Care for rebates.[5]

Pro tip: Use Homejourney's multi-bank submission – one form, multiple offers. Link to property search post-refi.

FAQ: Mortgage Refinancing Singapore

Q: What is the break-even point for refinancing?
A: Months to recover costs via savings. Formula: Total costs ÷ monthly savings. Aim under 24 months.[3]

Q: Repricing vs refinancing – which saves more?
A: Refinancing for >0.5% drop with rebates. See our guide: Refinancing vs Repricing: Which is Better for You? | Homejourney .

Q: Current best refinancing rates 2026?
A: From 1.35% fixed (min S$500k). Compare on https://www.homejourney.sg/bank-rates.[2]

Q: Can HDB owners refinance?
A: Yes, min S$200k. Check LTV/TDSR via our calculator.

Q: How long does refinancing take?
A: 2-4 weeks with Singpass on Homejourney.

Disclaimer: This is general advice. Consult Homejourney mortgage brokers or professionals. Rates change; verify on platform.

Ready to save? Calculate and apply at https://www.homejourney.sg/bank-rates. Homejourney ensures safe, transparent refinancing – your trusted partner. Back to pillar: Homejourney: Guide to Complete Guide to Mortgage Refinancing Singapore 2026 .