How to Calculate If Refinancing is Worth It: Homejourney Guide
Refinancing is worth it if your break-even period is shorter than your remaining loan tenure after accounting for all fees and potential savings. Homejourney makes this easy with our refinancing calculator at https://www.homejourney.sg/bank-rates#calculator, where you can compare rates from DBS, OCBC, UOB, HSBC and more.[1][2][3]
This cluster article dives deep into the calculations for Singapore homeowners, building on our pillar guide to . You'll get step-by-step formulas, real examples, and insider tips to ensure safe, transparent decisions—prioritizing your financial security as Homejourney always does.
Refinancing Fundamentals in Singapore
Refinancing means switching your entire home loan to a new bank for better rates or terms, unlike repricing which stays with your current bank. For HDB flats, minimum loan sizes start at S$200,000; private properties need S$300,000+.[6] Always check lock-in periods (typically 2-3 years) to avoid 1.5% penalties.[3]
Current 2026 rates hover around 1M SORA + 0.25% to 0.98% for Year 1, with banks like UOB offering 3M SORA + 0.70%.[1][3][6] Homejourney's platform lets you compare refinance rates across all major banks instantly, ensuring you get the best refinancing rate without visiting branches.
Step-by-Step: How to Calculate If Refinancing is Worth It
To determine if refinancing pays off, compute the break-even point: the time to recover costs through monthly savings.
- Calculate monthly payment difference: New Payment = [Loan Amount × Monthly Rate × (1 + Monthly Rate)^Tenure] / [(1 + Monthly Rate)^Tenure - 1]. Use DBS or Citibank calculators for precision.[2][4]
- Tally total costs: Legal fees (S$2,000-S$3,000), valuation (S$500-S$1,500), clawback penalties if within lock-in (1.5%). Subtract bank cash rebates (e.g., UOB S$2,000 for S$450k+ loans).[1][3]
- Break-even months: Total Costs / Monthly Savings. If under 24-36 months and you plan to keep the property longer, proceed.[3]
Example: S$1M loan, 25 years left. Current: 3M SORA +1.5% (~S$5,200/month). New OCBC: 1M SORA +0.98% (~S$4,800/month). Savings: S$400/month. Costs: S$4,000 (after S$2,500 rebate). Break-even: 10 months. Worth it![3][6]
Factor in SORA Rates and Current Trends
SORA (Singapore Overnight Rate Average), published daily by MAS, underpins most floating loans. 1M/3M Compounded SORA rates as of 2026 are around 1.1%-1.36% base.[1][6]
The chart below shows recent interest rate trends in Singapore:
As seen, rates have stabilized post-2025 peaks, making now ideal for locking fixed packages from DBS (1.50% Year 1) or UOB.[1][3] Track live SORA on Homejourney to time your switch mortgage rate perfectly.
Hidden Costs and Real Singapore Examples
Beyond basics, watch clawback (up to 1.5% if early exit) and processing fees. For a S$800k HDB in Toa Payoh, refinancing from DBS to HSBC might save S$450/month but cost S$3,500 net—break-even 8 months.[3]
Private condo in Orchard? S$1.5M loan: OCBC rebate S$2,800 covers fees, yielding S$6,000+ annual savings.[6] Read our deep dive on Hidden Refinancing Costs Singapore: Compare Rates Safely | Homejourney ">Hidden Refinancing Costs Singapore for more.Hidden Refinancing Costs Singapore: Compare Rates Safely | Homejourney
- Insider tip: Time before lock-in ends; negotiate via multi-bank apps for better rebates.
- Legal subsidies from new banks often net positive for loans >S$500k.[3]
Using Homejourney's Refinance Comparison Tool
Homejourney simplifies with our refinance comparison tool at https://www.homejourney.sg/bank-rates. Compare refinance rates from DBS (1.50% fixed Y1), OCBC (SORA+0.98%), UOB, HSBC, Standard Chartered, Maybank and more in one dashboard.[1][3][6]
Submit one application via Singpass—get offers from all banks competing for you. Calculate savings instantly; our tool factors TDSR/MSR too. See How to Use Homejourney Bank Rate Comparison: 2026 Guide ">How to Use Homejourney Bank Rate Comparison.How to Use Homejourney Bank Rate Comparison: 2026 Guide
When to Refinance: Timing and Strategies
Best now if rates drop below your current by 0.5%+. Avoid if <2 years left or selling soon (sale waivers on floating loans).[3] Negotiate: Leverage Homejourney multi-bank submission for 0.05-0.10% better rates.
Combine with goals like renovations—check eligibility at Homejourney calculator. For repricing vs refinancing, see our guide Refinancing vs Repricing: Which Saves You More Money in 2026? ">Refinancing vs Repricing: Which Saves You More Money in 2026? .
FAQ: How to Calculate If Refinancing is Worth It
Q: What's the minimum loan for refinancing?
S$200k HDB, S$300k private. Use Homejourney to bank comparison refinance options.[6]
Q: How long does refinancing take?
3-6 weeks. Faster with Singpass on Homejourney—see our Step-by-Step Singpass Loan Application Guide | Homejourney ">Singpass Guide.Step-by-Step Singpass Loan Application Guide | Homejourney
Q: Are there 2026 cash rebates?
Yes, S$2,000-S$2,800 for S$500k+ from UOB/OCBC. Compare on Homejourney.[1][6]
Q: Fixed or floating for refinancing?
Fixed for stability (e.g., DBS 1.50%); floating for flexibility. Use our How to Use Homejourney Mortgage Calculator: 2026 Guide ">Mortgage Calculator Guide.[2]How to Use Homejourney Mortgage Calculator: 2026 Guide
Q: Is refinancing safe?
Homejourney verifies all data, prioritizes your security. Disclaimer: Not financial advice; consult professionals.
Ready to see if refinancing saves you money? Start with Homejourney's free tools at https://www.homejourney.sg/bank-rates—compare, calculate, apply securely. Link back to our pillar for full home loan mastery. Your trusted partner for safe property decisions.
