How to Calculate If Refinancing is Worth It with Homejourney
To calculate if refinancing your home loan is worth it, compare your current monthly payments and total costs against new rates, factoring in fees like legal and valuation costs, then compute the break-even point where savings exceed expenses. Homejourney simplifies this with our refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, helping Singapore homeowners save thousands safely and transparently.[2][3][5]
Refinancing Fundamentals in Singapore
Refinancing means switching your home loan to a new bank for better rates or terms, unlike repricing which stays with the same bank but often costs $800-$1,000 in fees with inferior packages.[4] For HDB flats, refinancing switches from HDB or bank loans to another bank; private properties require banks only, with minimum loans of $200,000 for HDB and $300,000-$450,000 for private.[2][4][5]
Homejourney makes easy refinancing possible by letting you compare refinance rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and more in one place. Our platform verifies data via Singpass for a simple refinance process, ensuring user safety and trust.[4]
This cluster focuses on precise calculations for refinancing decisions, linking back to our pillar guide on Singapore home loans for full coverage. Use Homejourney to avoid pitfalls and maximize savings.
Step-by-Step: How to Calculate If Refinancing is Worth It
Start by gathering your current loan details: outstanding balance, interest rate, tenure, and monthly payment. For example, a $500,000 HDB loan at 3M SORA + 1.0% (about 3.5% p.a.) yields ~$2,500 monthly over 25 years.[1][3]
- Input current payment: Use Homejourney's calculator at https://www.homejourney.sg/bank-rates#calculator.
- Find new rates: Current promos like UOB's Year 1: 3M SORA + 0.5% (~3.0%), OCBC 1M SORA + 0.98%.[2][5]
- Estimate new payment: Same $500,000 at 3.0% drops to ~$2,360/month, saving $140/month.[1][3]
- Add costs: Legal fees ($2,000-$3,000, often subsidized), valuation ($500-$1,500), clawback (1.5% if in lock-in).[4]
- Calculate break-even: Total costs $3,500 / $140 savings = 25 months. If you stay longer, it's worth it.
Read our detailed guide on Hidden Costs of Refinancing & How Homejourney Makes It Easier ">Hidden Costs of Refinancing & How Homejourney Makes It Easier for insider tips on subsidies from banks like DBS and UOB.
Understanding SORA and Current Rates
SORA (Singapore Overnight Rate Average), published daily by MAS, is the key benchmark for floating loans, replacing SIBOR. 3M Compounded SORA is around 3.0% as of 2026, making packages like DBS 3M SORA + 0.70% attractive.[2][4][5]
The chart below shows recent interest rate trends in Singapore:
As seen, rates have stabilized post-peak, ideal for refinancing if your current spread exceeds 1.0%.[2][5] Track live SORA on Homejourney to time your move perfectly.
Hidden Costs and Real Singapore Examples
For a $800,000 private condo in Punggol, refinancing from 3.8% to UOB's 3.0% saves $250/month. Costs: $2,500 legal (subsidized), $1,000 valuation, no clawback post-lock-in = $3,500 total. Break-even: 14 months. Annual savings post-break-even: ~$2,500.[2][4]
HDB example: $400,000 Ang Mo Kio flat from HDB 2.6% to OCBC promo. Savings $80/month, costs $2,000 (subsidized), break-even 25 months. Always check LTV/TDSR limits via Homejourney's eligibility tool.[5]
Insider tip: Banks subsidize fees for loans over $400,000 private/$300,000 HDB, but confirm with Homejourney's multi-bank comparison.[4]
Timing and Eligibility for Refinancing
Refinance 4 months before lock-in ends to avoid 1.5% penalties. Best now with stable SORA; fixed rates suit planners.[4] Eligibility: 21+, min loan amounts, TDSR <55%.[5]
With Homejourney, one-click refinance via Singpass submits to all partners (DBS, OCBC, UOB, HSBC, etc.), letting banks compete. See How Homejourney Makes Refinancing Your Mortgage Easier in Singapore ">How Homejourney Makes Refinancing Your Mortgage Easier in Singapore .
Money-Saving Strategies with Homejourney
- Compare rates: Homejourney shows UOB $2,000 cash for $450k+, OCBC rewards.[2][5]
- Negotiate: Multi-offers strengthen your position.
- Combine goals: Refinance and search budget properties at https://www.homejourney.sg/search.
- Use calculator: Instant savings projection. Learn more at How to Use Homejourney Mortgage Calculator: 2026 Guide ">How to Use Homejourney Mortgage Calculator: 2026 Guide .
Disclaimer: This is general advice; consult professionals. Rates fluctuate; verify on Homejourney for latest.
FAQ: How to Calculate If Refinancing is Worth It
What is the break-even formula for refinancing?
Break-even months = Total refinancing costs / Monthly savings. E.g., $4,000 costs / $200 savings = 20 months.[1][3]
Is refinancing worth it for HDB loans?
Yes if switching to bank promos under HDB's 2.6%, but can't return to HDB. Use Homejourney for HDB-private comparisons.[4]
How much can I save refinancing $1M condo?
From 3.8% to 3.0%: ~$400/month, $20k+ over 5 years post-fees. Check https://www.homejourney.sg/bank-rates.[2][5]
What's the simple refinance process on Homejourney?
Compare rates, calculate savings, apply via Singpass to multiple banks. See Singpass贷款申请完整步骤指南：Homejourney安全攻略 ">Singpass贷款申请完整步骤指南：Homejourney安全攻略 .
When to refinance with Homejourney?
Post-lock-in, rates drop 0.5%+, plan to stay 3+ years. Start at our bank rates page.
Ready to see if refinancing is worth it? Visit https://www.homejourney.sg/bank-rates for one-click refinance, rate comparisons, and expert guidance. Link back to our pillar on Singapore mortgages for more.
