How to Calculate If Refinancing is Worth It: Homejourney Guide
Refinancing your home loan is worth it if the monthly savings exceed the total costs within 2-3 years, calculated as break-even period = total refinancing costs ÷ (old monthly payment - new monthly payment).[1][2][3]
Homejourney prioritizes your safety and trust by verifying rates from DBS, OCBC, UOB, and more. This cluster article builds on our pillar guide to Singapore home loans, offering tactical steps for investment property refinance and rental property refinance. Start with our bank rates comparison for real-time SORA rates.
Refinancing Fundamentals in Singapore
Refinancing means switching your entire loan to a new bank or package, often for better rates on second property loans or investor mortgages. Repricing stays with the same bank but changes terms. Refinancing suits when rates drop significantly, like current 3M SORA + 0.70% p.a. promotions from UOB.[1]
For HDB flats or private condos, check lock-in periods first—typically 2-3 years. Homejourney's platform lets you track live 3M/6M SORA via Singpass for instant verification, ensuring transparent decisions.
Refinancing vs Repricing: Quick Comparison
| Aspect | Refinancing | Repricing |
|---|---|---|
| Bank Switch | Yes | No |
| Costs | Legal fees, valuation (~S$2,000-S$5,000) | Lower (~S$1,500) |
| Rewards | Cashback up to S$2,800 (OCBC)[3] | Smaller incentives |
Read our detailed comparison in Refinancing vs Repricing: Which is Better for You?.
Step-by-Step: How to Calculate If Refinancing is Worth It
Follow these actionable steps using real Singapore examples. Assume a S$1M condo loan, 20 years left, current rate 3M SORA + 1.5% (monthly ~S$5,800), new rate 3M SORA + 0.8% (~S$5,200).[1][3]
- Step 1: Gather Current Loan Details
Get your loan statement from DBS/OCBC. Note outstanding principal, monthly payment, remaining tenure. - Step 2: Get New Quotes
Compare on Homejourney's bank rates page—DBS, UOB, HSBC. Factor cash rebates (e.g., UOB S$2,000 for S$450k+).[1] - Step 3: Calculate Monthly Savings
New payment - Old payment = S$600/month savings. - Step 4: Tally Costs
Legal: S$2,000; Valuation: S$500; Clawback (if early): 1.5% of loan; Processing: S$200. Total ~S$4,000. See Hidden Refinancing Costs. - Step 5: Compute Break-Even
S$4,000 ÷ S$600 = 6.7 months. Worth it if staying >1 year. - Step 6: Project Total Savings
Over 20 years: S$600 x 240 = S$144,000 minus costs = S$140,000 net.
Use Homejourney's refinancing calculator at mortgage calculator for instant results with Singpass.
Hidden Costs and Real Singapore Examples
For a S$800k HDB in Toa Payoh, refinancing from OCBC to UOB: Old rate 3M SORA +1.2%, new +0.7%. Savings S$450/month, costs S$3,200, break-even 7 months.[3] Investors note TDSR 55% limit—Homejourney verifies eligibility instantly.
Investment property refinance tip: For rental yield condos like those in Projects , factor vacancy risks. A S$1.2M unit at 4% yield saves S$800/month post-refi, ideal for property portfolio refinancing.
Timing Your Refinance: Lock-Ins and SORA Trends
Exit lock-in (2 years UOB) penalty-free, or negotiate 50% waiver on sale.[1] With 2025 SORA at ~3%, refi now if +spread drops below 1%. Track via Homejourney's real-time dashboard.
- Best time: 3-6 months pre-lock-in end.
- Investor strategy: Refi rental property refinance when cap rates compress.
- Combine with goals like funding a second property search.
Money-Saving Strategies for Singapore Borrowers
Negotiate: Pit UOB S$2,500 vs OCBC S$2,800 rebates.[1][3] Submit one app via Homejourney to all banks (DBS to Citibank)—let them compete. Use Singpass for 24-hour processing.
Pro tip: Prepay 20% penalty-free yearly (UOB).[1] For investor mortgages, bundle with Maybank/CIMB for portfolio deals.
Homejourney Makes Refinancing Safe and Simple
Trust Homejourney for verified rates—no branch hopping. Compare DBS/OCBC/UOB/HSBC/Standard Chartered, apply multi-bank, track SORA. Get WhatsApp support for how to calculate if refinancing is worth it.
Disclaimer: This is general advice; consult professionals. Rates as of Dec 2025, subject to MAS/HDB rules.
FAQ: How to Calculate If Refinancing is Worth It
Q1: What's the break-even formula for refinancing?
A: Total costs ÷ monthly savings. E.g., S$4,000 ÷ S$500 = 8 months.[2]
Q2: Is refinancing good for investment properties?
A: Yes, if savings boost yields. Use Homejourney for investment property owners guide.
Q3: How much are 2025 refinancing cashbacks?
A: Up to S$2,800 (OCBC S$1.5M+), S$2,500 (UOB S$1M+).[1][3] Compare at 2025 Best Rates.
Q4: Can I refi HDB loans?
A: Yes, min S$200k (OCBC). Check LTV/TDSR on our calculator.
Q5: What's SORA in refinancing?
A: Singapore Overnight Rate Average—benchmark for floating rates, published daily by MAS.
Ready to save? Compare rates and apply now on Homejourney. Link back to our pillar: Singapore Mortgage Guide for full coverage.
