How to Calculate If Refinancing is Worth It: Homejourney Guide

Refinancing your home loan is worth it if monthly savings exceed total costs within 2-3 years, typically saving S$200+ monthly on loans over S$500,000 at current 2026 rates around 1.5-1.8% p.a.[2].

Homejourney makes this calculation simple with our free refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, where you can compare rates from DBS, OCBC, UOB, HSBC and more in one place.

What is Refinancing and When Does It Make Sense?

Refinancing means switching your entire home loan to a new bank for better rates or terms, unlike repricing which stays with the same bank. It's ideal when market rates drop below your current rate by 0.5% or more, or if cash rebates exceed S$2,000 on loans above S$500,000.[2]

In Singapore's 2026 market, with SORA at around 1.1-1.36%, many HDB and private property owners can save significantly by refinancing from older fixed rates above 2%.[2] For example, a S$1M loan at 2.5% vs 1.5% saves S$800 monthly.

Read our pillar guide on Refinancing vs Repricing: Which is Better for Singapore Homeowners? | Homejourne... ">Refinancing vs Repricing for broader context. Homejourney prioritizes your safety by verifying all bank offers transparently.

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

Follow these actionable steps using Homejourney's tools for accurate, Singapore-specific calculations compliant with MAS and HDB rules.

Input Current Loan Details: Note your outstanding loan (e.g., S$800,000), current rate (e.g., 2.2%), tenure left (25 years), and monthly payment (e.g., S$3,500).[1][3]
Compare New Offers: Use Homejourney's bank rates page at https://www.homejourney.sg/bank-rates to see top rates like 1.50% fixed from UOB or 1M SORA +0.25% from DBS (min S$500k).[2]
Calculate Monthly Savings: New payment minus old. Example: S$3,500 - S$2,900 = S$600 saved monthly.[1]
Add Total Costs: Legal fees (S$2,000-3,000), valuation (S$500-1,500), possible clawback (1.5% if in lock-in).[2] New banks often rebate S$2,000-2,800, netting positive.[2]
Compute Break-Even: Costs ÷ Monthly Savings = Months to recover. E.g., S$3,000 net cost ÷ S$600 = 5 months. Worth it if under 24 months.
Factor Long-Term Savings: Over 25 years, S$600 x 300 months = S$180,000 saved, minus costs.

Try it risk-free on Homejourney – How to Use Homejourney Mortgage Calculator: 2026 Guide ">How to Use Homejourney Mortgage Calculator.

Understanding Current SORA Rates and Trends

SORA (Singapore Overnight Rate Average) is the key benchmark for floating loans in Singapore, pegged by MAS. Most packages tie to 1M/3M SORA +0.25-0.60%.[2]

The chart below shows recent interest rate trends in Singapore:

As seen, rates stabilized around 1.1-1.4% in late 2025, making now ideal for refinancing fixed rates above 1.8%.[2] Track live SORA on Homejourney for perfect timing.

Real Singapore Example: HDB Flat in Tampines Refinance

Consider an HDB 5-room flat in Tampines, valued S$900,000, outstanding loan S$600,000 at DBS 2.0% fixed (25 years left), monthly S$2,550.

Switch to OCBC 1.50% fixed (2-year lock-in, S$2,300 rebate): New payment S$1,950, savings S$600/month. Costs: S$2,500 legal/valuation - S$2,300 rebate = S$200 net. Break-even: <1 month. Annual savings: S$7,200.[1][2]

For private condos like those near Orchard MRT, similar math applies but check LTV limits (max 75% for 2nd property).[9] Homejourney's property search helps verify valuations.

Hidden Costs and How to Minimize Them

Beyond basics: Notice of Assessment fee (S$200), admin fees (S$100-300), and 1.5% penalty if breaking lock-in early.[2] Total often S$3,000-5,000, but rebates from HSBC/Standard Chartered cover most for S$1M+ loans.[2]

Choose no-branch-visit digital refinancing via Homejourney – apply online with Singpass.Refinance Home Loan Online: No Bank Visits via Homejourney
Submit one form for multi-bank offers: DBS, UOB, Maybank compete, maximizing rebates.
Avoid if <12 months left in lock-in unless selling (waivers common).[2]

Net gain often S$500+ after costs. See Hidden Refinance Costs Without Bank Visits: Homejourney Guide ">Hidden Refinance Costs Guide.

Best Timing and Negotiation Tips

Refinance 3-6 months before lock-in ends. With SORA steady, 2026 fixed offers at 1.35-1.78% are attractive.[2]

Negotiate: Leverage Homejourney's multi-bank system – Benefits of Multi-Bank Application in One Click | Homejourney ">one application, multiple offers. Mention competitor rates (e.g., CIMB 1.35%) for better deals. Use Singpass for instant verification.Step by Step Singpass Loan Application Guide | Homejourney

Disclaimer: This is general advice; consult Homejourney mortgage brokers or financial advisors. Rates per MAS guidelines, subject to TDSR/LTV.[1][9]

FAQ: How to Calculate If Refinancing is Worth It

1. How long should break-even be for refinancing?
Under 24 months is ideal; calculate via Homejourney at https://www.homejourney.sg/bank-rates.[3]

2. What documents for refinance online?
Singpass, NRIC, property title, latest statements. Homejourney auto-fills via MyInfo – no branch visits.

3. Can HDB owners refinance?
Yes, after MOP; max 75% LTV. Use our calculator for CPF usage.[6][9]

4. Best banks for refinance 2026?
Compare DBS (1.78% fixed), UOB (1.50%), OCBC on Homejourney – plus S$2,000+ rebates.[2]

5. Is digital refinancing safe?
Homejourney verifies all data, ensures bank competition for best offers in a trusted environment.

Ready to calculate if refinancing is worth it? Start with Homejourney's comparison tool at https://www.homejourney.sg/bank-rates – compare refinance offers, apply digitally, and save without hassle. Link back to our pillar on Singapore home loans for full coverage.