How to Calculate If Refinancing is Worth It | Homejourney

To determine if refinancing your Singapore home loan is worth it, calculate the break-even point by dividing total refinancing costs by your monthly savings from the new lower rate. If you plan to stay in your property longer than this period, refinancing typically saves money. Homejourney makes this easy with our refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, ensuring transparent, verified comparisons from DBS, OCBC, UOB and more.

This cluster article dives into the tactical steps for how to calculate if refinancing is worth it, building on our pillar guide to Singapore home loans. At Homejourney, we prioritize your safety and trust by verifying all data and providing tools for confident decisions. Whether you're an HDB owner in Toa Payoh or a condo investor in Orchard, these insights help you navigate refinance timing securely.

Refinancing Fundamentals: Know When It Makes Sense

Refinancing means switching your entire home loan to a new bank or lender for better rates or terms, unlike repricing which stays with the same bank. In Singapore, refinancing shines when to refinance mortgage opportunities arise, like after your lock-in period ends or when rates drop. For instance, if your current 3M SORA + 1.5% rate could switch to UOB's promo of 3M SORA + 0.70% in year 1, potential savings add up fast[2].

Singapore's market uses SORA (Singapore Overnight Rate Average) as the key benchmark, published daily by MAS. Track live 3M SORA on Homejourney to spot the best time refinance. Real example: A $1M loan owner in Punggol saved $300 monthly by refinancing post-lock-in, per typical bank offers[6]. Always check https://www.homejourney.sg/bank-rates for current rates from our partners like HSBC and Standard Chartered.

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

Follow these actionable steps to crunch the numbers accurately.

Gather your current loan details: Note monthly payment, interest rate, remaining tenure, and outstanding principal. Use DBS's repayment calculator style for precision[3].
Find new loan quotes: Compare on Homejourney – submit one application via Singpass to DBS, OCBC, UOB, HSBC, Maybank and others for competing offers.
Calculate monthly savings: New payment minus old payment. Example: $1M loan, 25 years left, old rate 3.5% ($5,300/month), new 3.0% ($4,800/month) = $500 savings.
Tally costs: Legal fees ($2,000-$3,000), valuation ($500-$1,500), admin fees ($200+), possible clawback (up to 1.5% if early exit). Total ~$5,000 for HDB[1].
Compute break-even: Costs ÷ monthly savings = months to recover. $5,000 ÷ $500 = 10 months.
Project total savings: (Monthly savings × remaining months) minus costs.

For a $800,000 HDB loan in Jurong West, refinancing from 3.2% to OCBC's 1M SORA + 0.98% could break even in 8-12 months, saving $20,000 over 20 years[6]. Use Homejourney's multi-bank tool to get real quotes instantly.

Hidden Costs and the Interest Rate Trigger

Beyond obvious fees, watch for processing fees, discharge fees, and penalties if within lock-in. Lock-in period end is prime refinance timing – typically 2-3 years[2]. The interest rate trigger? Refinance if new rate saves ≥0.5% p.a., but calculate fully.

SORA trends matter: Rates averaged ~3% in 2025, per MAS data. The chart below shows recent interest rate trends in Singapore:

As seen, if 3M SORA dips below your spread, act. Insider tip: Start 3-6 months before lock-in ends to avoid rushed penalties. See our related article: Hidden Refinancing Costs & Best Timing.

Real Singapore Examples: HDB vs Private Property

HDB example: $500,000 loan, 20 years left, current $2,800/month at 3.4%. Refinance to UOB: $2,500/month. Costs $4,000. Break-even: 8 months. Worth it if staying 5+ years.

Private condo (e.g., Tampines): $1.2M loan, switch to Citibank-like deal saves $600/month, costs $6,000. Break-even: 10 months[4]. Cash rebates up to $2,800 from OCBC sweeten it[6].

Compare rates safely on Homejourney – no branch hopping needed. Link to our pillar: When to Refinance in Singapore.

Money-Saving Tips and Next Steps

Negotiate: Leverage quotes from multiple banks via Homejourney's one-click application.
Time it: Post-lock-in period end, especially if SORA falls.
Combine rebates: UOB offers $2,000+ for $450k+ loans[2].
Check eligibility: TDSR under 55%, LTV rules via HDB/URA.

Disclaimer: This is general advice; consult professionals. Homejourney verifies data for trust.

FAQ: Common Refinancing Questions

1. When is the best time to refinance my Singapore home loan?
Typically at lock-in period end or when rates drop 0.5%+. Use Homejourney's SORA tracker.

2. What costs should I include in refinancing calculations?
Legal ($2-3k), valuation ($500+), fees, clawback. Total $4-7k average.

3. Is refinancing better than repricing?
Refinancing often wins for better rates. Compare via Refinancing vs Repricing.

4. How do I start on Homejourney?
Visit https://www.homejourney.sg/bank-rates, use Singpass for quotes from 10+ banks.

5. Current best refinancing rates?
Check Best Bank Rates 2026 on Homejourney.

Ready to save? Calculate now at Homejourney's refinancing calculator and apply securely. For full coverage, read our pillar on Singapore mortgages. Homejourney: Your trusted partner for safe property journeys.