How to Calculate If Refinancing Is Worth It | Homejourney
Refinancing your home loan is worth it if the monthly savings exceed total costs within 2-3 years, calculated as break-even period = total refinancing costs ÷ (current monthly payment - new monthly payment).[1][2] Homejourney simplifies this with our free refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, helping Singapore homeowners like you make safe, data-driven decisions.
This cluster article on how to calculate if refinancing is worth it builds on our pillar guide, Mortgage Refinancing Singapore 2026: Homejourney Guide Mortgage Refinancing Singapore 2026: Homejourney Guide . It provides tactical steps for HDB and private property owners considering a switch mortgage bank or rate adjustment amid fluctuating SORA rates.
Refinancing Fundamentals: Repricing vs Refinancing
Refinancing involves switching to a new bank for potentially better rates, while repricing stays with your current bank for a new package. Refinancing suits those whose lock-in period has ended and who want cash rebates from banks like DBS, OCBC, or UOB; repricing is faster (1 month) but costs ~S$1,000 in admin fees.[7] For example, HDB owners with loans over S$200,000 qualify for refinancing at most banks.[4]
Learn more in our related article: Refinancing vs Repricing: Which is Better for You? Refinancing vs Repricing: Which is Better for You? | Homejourney . Always verify eligibility on Homejourney's bank rates page: https://www.homejourney.sg/bank-rates.
Step-by-Step: How to Calculate If Refinancing Is Worth It
To determine if refinancing pays off, follow these refinancing steps:
- Gather current loan details: Note your outstanding loan (e.g., S$500,000), interest rate (e.g., 3M SORA + 0.98% = ~3.5%), tenure left (e.g., 25 years), and monthly payment (use DBS calculator for precision).[1]
- Estimate new loan terms: Compare rates on Homejourney from DBS, OCBC, UOB, HSBC, Standard Chartered—Year 1 often 1M SORA + 0.98%.[4] Project new payment.
- Calculate monthly savings: New payment - current payment. Example: S$2,500 current vs S$2,300 new = S$200 savings.
- Tally costs: Legal fees (S$2,000-S$3,000), valuation (S$500-S$1,500), admin (S$200), clawback if early exit (1.5%). Total ~S$4,000-S$6,000.[7]
- Compute break-even: Costs ÷ savings = months to recover (e.g., S$5,000 ÷ S$200 = 25 months).
If break-even < remaining tenure and you plan to stay 3+ years, proceed. Use Homejourney's tool for instant calculations with Singpass integration.
Understanding SORA and Current Rates
SORA (Singapore Overnight Rate Average), published daily by MAS, is the key benchmark for floating loans in Singapore. Most packages peg to 1M/3M Compounded SORA + bank spread (e.g., +0.98% Year 1).[4][7] Fixed rates like OCBC's 2Y/3Y offer stability but revert higher later.
The chart below shows recent interest rate trends in Singapore:
As seen, SORA has hovered ~3%, making refinancing attractive if your rate exceeds 4%. Track live rates on Homejourney to time your refinance application.
Real Singapore Example: HDB Refinancing Calculation
Consider a Toa Payoh HDB flat owner with S$400,000 outstanding at 4% rate, 20 years left: Monthly ~S$2,420.[1] Switching to UOB's promo (3M SORA + 0.98% ~3.2%): New monthly ~S$2,200. Savings: S$220.
Costs: Legal S$2,500, valuation S$800, processing S$300 = S$3,600. Break-even: 16 months. With 20 years left, net savings ~S$40,000 over tenure. Compare real-time offers on Homejourney's bank rates.
Private property example (e.g., S$1M condo): Minimum S$300,000 loan, potential OCBC cash reward S$2,500+.[4]
Hidden Costs and Timing Tips
Factor clawback (1.5% if within lock-in), penalties, and processing delays (2-3 months).[7] Best time: Post-lock-in, when SORA dips. Avoid if tenure <5 years left per ABS guidelines.[1]
Details in Hidden Costs in Refinancing Mortgage Hidden Costs in Refinancing Mortgage: Step-by-Step Guide | Homejourney .
Refinance Process and Homejourney Advantages
The refinance process takes 6-12 weeks: Apply, valuation, legal completion. On Homejourney, submit one application to DBS, OCBC, UOB, HSBC, etc., via Singpass—get competing offers fast. Our brokers guide you safely.
- Compare rates: https://www.homejourney.sg/bank-rates
- Calculate savings instantly
- Multi-bank submission—no branch visits
- Track SORA live
See full how to refinance in Step-by-Step Guide to Refinancing Your Mortgage in Singapore Step-by-Step Guide to Refinancing Your Mortgage in Singapore | Homejourney .
FAQ: How to Calculate If Refinancing Is Worth It
Q: When is refinancing not worth it?
A: If break-even >3 years or costs exceed savings, stick with repricing. Use Homejourney calculator.
Q: What documents for refinance application?
A: Singpass-linked NRIC, income proofs, property title, latest statements. Homejourney auto-fills via MyInfo.
Q: Best banks for refinancing 2026?
A: Compare DBS, OCBC, UOB promos on Homejourney. See Best Bank Refinancing Rates Comparison 2026 Best Bank Refinancing Rates Comparison 2026 | Homejourney .
Q: Does refinancing affect TDSR?
A: No, if payments stay compliant. Check eligibility on Homejourney.
Q: HDB vs private refinancing differences?
A: HDB min S$200k, private S$300k; both SORA-based.[4]
Disclaimer: This is general advice. Consult professionals; rates change. Homejourney verifies data for your trust.
Ready to save? Start with Homejourney's refinancing calculator and bank comparison at https://www.homejourney.sg/bank-rates. Link back to our pillar for full refinancing insights Mortgage Refinancing Singapore 2026: Homejourney Guide . Your safe property journey starts here.
