How to Calculate If Refinancing is Worth It: Homejourney Guide

Refinancing is worth it if your break-even period—the time to recover switching costs through monthly savings—is shorter than your remaining loan tenure, typically under 2-3 years for most Singapore homeowners. Use Homejourney's refinancing calculator at https://www.homejourney.sg/bank-rates#calculator to crunch your numbers instantly and compare rates from DBS, OCBC, UOB, HSBC, and more.[1][2]

This cluster article dives deep into 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 rates and simplifying the refinance process with Singpass integration for faster, secure applications.

What is Mortgage Refinancing 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. For HDB flats or private properties, you can refinance if your lock-in period has ended, often saving on interest amid fluctuating SORA rates. Banks like DBS offer fixed rates from 1.35% for loans over S$500k, with cash rebates up to S$2,800 covering legal fees.[1]

Read our detailed comparison in Refinancing vs Repricing: Which is Better for You for when each suits your needs.

Key Factors Before Calculating Savings

To decide if refinancing pays off, factor in your current rate (e.g., 3M SORA + 0.80% at UOB), new offer (e.g., 1.50% fixed at OCBC), loan amount, tenure, and costs like valuation (S$200-500) and legal fees (S$2,000-3,000, often subsidized).[1][3]

SORA, the Singapore Overnight Rate Average, is the key benchmark since 2020, replacing SIBOR. Track live 3M and 6M SORA on Homejourney to time your switch mortgage bank move perfectly. The chart below shows recent interest rate trends in Singapore:

As seen in the chart, SORA has hovered around 3% in 2025-2026, making fixed-rate packages attractive for stability.[1][3]

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

Follow these refinancing steps to determine viability with a real Singapore example: S$800,000 HDB loan, 20 years left, current rate 3.5% (S$4,200/month), new rate 2.0% (S$3,700/month).

Calculate monthly savings: New payment - Current payment = S$500/month.
Estimate total switching costs: Legal fees S$2,500 (subsidized to S$0 by new bank rebate) + Valuation S$400 + Clawback (1.5% if in lock-in, e.g., S$12,000) = S$2,900 total.[1][3]
Find break-even months: Costs ÷ Savings = S$2,900 ÷ S$500 = 5.8 months (~6 months).
Compare to tenure: If >20 years left, yes—save S$108,000+ over life.[2]
Adjust for tenure/rate changes: Use Homejourney's tool at https://www.homejourney.sg/bank-rates for precise figures.

Example: For a S$1M private condo loan in Orchard, refinancing from DBS 3.2% to Maybank 1.60% fixed saves S$800/month. With S$2,500 rebate, break-even is 3 months—ideal if planning to hold 10+ years.[1]

Hidden Costs and How to Minimize Them

Don't overlook clawback penalties (up to 1.5% of loan) if breaking lock-in early, or processing fees. Banks subsidize for loans >S$500k HDB/S$400k private, e.g., HSBC offers S$2,300 rebate.[1][3] Insider tip: Time refinance 4 months before renewal to avoid hikes.

Details in our Hidden Costs in Refinancing Mortgage Guide. Compare full packages on Homejourney to ensure rebates cover all.

The Refinance Application Process on Homejourney

Here's the how to refinance and refinance process in Singapore:

Check eligibility: LTV <90% for refinance, TDSR <55% via Homejourney calculator.
Compare rates: DBS 1.35%*, OCBC 1.50%, UOB 1M SORA+0.25% on https://www.homejourney.sg/bank-rates.[1]
Submit multi-bank app: One form via Singpass gets offers from all partners—no branch visits.
Valuation & legal: 2-4 weeks; banks handle.
Disburse: 1-2 months total. Track via Homejourney dashboard.

Submit one application to DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, Citibank—let them compete![1]

When to Refinance: Timing Tips

Best now in 2026: Fixed rates 1.35-1.78% beat SORA floats amid stable trends.[1] Avoid if <2 years left or high clawback. For HDB upgraders in areas like Punggol, pair with property search on https://www.homejourney.sg/search.

Check Best Bank Refinancing Rates Comparison 2025 for latest.

FAQ: How to Calculate If Refinancing is Worth It

Q: How long should break-even be to refinance?
A: Under 24-36 months for most; use Homejourney calculator for your scenario.[2]

Q: Can I refinance HDB loans?
A: Yes, to banks but not back to HDB. Minimum S$300k outstanding.[3]

Q: What documents for refinance application?
A: Singpass, NRIC, loan statements, income proofs—auto-filled on Homejourney.[3]

Q: Are there rebates in 2026?
A: Yes, S$2,000-2,800 from top banks for S$500k+ loans.[1]

Q: Fixed or floating for refinance?
A: Fixed for predictability if SORA rises; compare on Homejourney.

Next Steps with Homejourney

Calculate your savings today at https://www.homejourney.sg/bank-rates#calculator and apply securely. For full home loan mastery, read our pillar guide. Homejourney ensures transparent, verified advice—your trusted partner for safe property decisions.

Disclaimer: This is general guidance; consult professionals for personalized advice. Rates as of Jan 2026, subject to change.[1]