How to Calculate If Refinancing is Worth It with Homejourney
To determine if refinancing your home loan is worth it, calculate the break-even point by dividing total refinancing costs by monthly savings from the new lower rate. If the break-even period is shorter than your remaining loan tenure, refinancing saves money long-term.
This cluster article provides a step-by-step guide tailored for Singapore homeowners, building on our pillar guide to Singapore home loans. Homejourney prioritizes your safety with transparent tools like our refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, ensuring verified data for confident decisions.[1][2][5]
What is Refinancing and When Does It Make Sense?
Refinancing means switching your existing home loan to a new one from the same or different bank, often for better rates or terms. Unlike repricing (staying with your current bank for a new package), refinancing lets you shop across banks like DBS, OCBC, UOB, HSBC, and Standard Chartered via Homejourney.[2][5]
It makes sense when rates drop, such as current 1M SORA + 0.25% offers (around 1.36% effective), versus older fixed rates above 2%.[1][2] For HDB owners with loans over S$200,000 or private property over S$300,000, potential savings can reach thousands annually.[5]
Read our detailed comparison in Refinancing vs Repricing: Which is Better for You | Homejourney ">Refinancing vs Repricing: Which is Better for You | Homejourney for when each option fits.[1]
Step-by-Step: How to Calculate If Refinancing is Worth It
Follow these actionable steps using Homejourney's free tools for accurate, Singapore-specific calculations.
- Gather Your Current Loan Details: Note your outstanding loan amount, current interest rate, monthly payment, and remaining tenure. For example, a S$800,000 HDB loan at 2.5% p.a. over 25 years has ~S$3,800 monthly payments.[7]
- Compare New Rates on Homejourney: Visit https://www.homejourney.sg/bank-rates to compare refinance rates from DBS (Year 1: 3M SORA +0.70%), OCBC (1M SORA +0.98%), UOB, HSBC, and more. A new rate of 1.5% could drop payments to ~S$3,200.[1][2][5]
- Calculate Monthly Savings: Subtract new payment from current: S$3,800 - S$3,200 = S$600 savings per month.[3]
- Tally Refinancing Costs: Include legal fees (S$2,000-S$3,000), valuation (S$500-S$1,500), bank processing (S$200-S$500), and possible clawback penalties (1.5% of loan if within lock-in). Total: ~S$5,000-S$8,000. Cash rebates offset this—UOB offers S$2,000 for S$450k+ loans, OCBC up to S$2,800.[1][2][5]
- Compute Break-Even Point: Costs ÷ Monthly Savings = Break-Even Months. Example: S$6,000 net costs ÷ S$600 = 10 months. If your loan runs 20+ years, it's worth it.
- Factor Total Savings: Use Homejourney's calculator for full projection: S$600 x 12 months x 20 years = S$144,000 potential savings, minus costs.
Test scenarios instantly at https://www.homejourney.sg/bank-rates#calculator. Always verify with MAS guidelines on LTV and TDSR.[3][8]
Current SORA Trends and Rate Environment
SORA (Singapore Overnight Rate Average), published daily by MAS, benchmarks most floating loans. 3M Compounded SORA is ~2.8% as of 2026, but packaged rates start lower (e.g., 1M SORA +0.25%).[1][5]
The chart below shows recent interest rate trends in Singapore:
As seen, rates have stabilized post-peak, making now ideal for fixed-to-floating switches if your lock-in ends.[1][2]
Hidden Costs and Real Singapore Examples
Beyond basics, watch for 1.5% prepayment penalties within 2-3 year lock-ins (often waived on sale).[2] HDB resale in mature estates like Toa Payoh (S$600k-S$1M) refinancers saved S$20,000 over 5 years switching from 2.6% to 1.6%, per typical calculations.[1][5]
Example: S$1M private condo in Orchard, current 2.2% to UOB's 3M SORA +0.70% (Year 1 ~1.5%). Net costs S$4,500 after S$2,500 rebate; break-even 8 months; 15-year savings S$90,000. Insider tip: Time before lock-in ends to avoid penalties—check via Singpass on Homejourney.[2]
Learn more on costs in Hidden Costs of Refinancing & How Homejourney Simplifies It ">Hidden Costs of Refinancing & How Homejourney Simplifies It .
Simplify Refinancing with Homejourney's Safe Process
Homejourney makes easy refinancing safe: Compare rates one-click, submit one application to DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, and more via Singpass for instant verification. Track real-time SORA and receive competing offers—no branch visits.[1][5]
Steps: 1) Compare at https://www.homejourney.sg/bank-rates. 2) Calculate savings. 3) Apply once—banks bid. 4) Track securely. See How Homejourney Makes Refinancing Your Mortgage Easier in Singapore ">How Homejourney Makes Refinancing Your Mortgage Easier in Singapore and 一键多银行申请的好处：Homejourney Singpass房贷指南 ">一键多银行申请的好处：Homejourney Singpass房贷指南 .
Disclaimer: This is general guidance; consult professionals for personalized advice. Homejourney verifies data for trust.
FAQ: How to Calculate If Refinancing is Worth It
How long should break-even be to refinance?
Under 12-18 months for most, depending on tenure. Use Homejourney calculator for precision.[3]
What costs should I include?
Legal (S$2k+), valuation (S$500+), penalties (1.5%), minus rebates (S$2k-S$2.8k).[1][2][5]
Is refinancing good for HDB loans?
Yes, if over S$200k and rates 0.5%+ lower. Check eligibility at https://www.homejourney.sg/bank-rates.[5]
How does Singpass help?
Auto-fills applications for faster, secure processing. Full guide: Singpass贷款申请完整步骤指南：Homejourney安全指南2026 ">Singpass贷款申请完整步骤指南：Homejourney安全指南2026 .
Best banks for refinance now?
Compare DBS, OCBC, UOB via Homejourney for lowest SORA spreads and rebates.[1][2]
Ready for easy refinancing? Start with https://www.homejourney.sg/bank-rates for simple refinance process, compare refinance rates, and one-click refinance with Homejourney. Link back to our pillar: Singapore Home Loans Guide for full coverage. Build trust with verified savings today.
