How to Calculate If Refinancing is Worth It: Homejourney Guide

Refinancing is worth it if your monthly savings exceed the total costs within your remaining loan tenure, typically calculated via the break-even point using a refinance calculator. Homejourney makes this easy with our free tools to compare rates from DBS, OCBC, UOB and more, ensuring you make safe, informed decisions in Singapore's property market.

This cluster article dives into the tactical steps for how to calculate if refinancing is worth it, building on our pillar guide to Singapore home loans. As a trusted platform prioritizing user safety and transparency, Homejourney verifies all data so you can confidently assess if refinancing is worth it for your HDB flat or private property.

Refinancing Fundamentals in Singapore

Refinancing involves switching your home loan to a new bank for better rates or terms, unlike repricing which stays with the same bank. In Singapore, most loans are pegged to SORA (Singapore Overnight Rate Average), with current 3M compounded SORA around 3.0% as of early 2026[1][3]. Banks like UOB offer promotional packages at 3M SORA + 0.70% for Year 1, dropping slightly thereafter[1].

It's ideal post-lock-in period (usually 2-3 years) when rates fall or your profile improves. Check Homejourney's bank rates page to compare DBS, OCBC, UOB, HSBC, Standard Chartered and others instantlyBest Bank Refinancing Rates Comparison 2026 | Homejourney .

Legal fees (~S$2,000-S$4,000), valuation (~S$500-S$1,500) and potential clawback penalties apply, often offset by cash rebates like UOB's S$2,000 for loans over S$450k[1]. Always factor these refinancing costs to see net gains.

Step-by-Step: How to Calculate Break-Even for Refinancing

To determine should I refinance, compute the break-even period: Total Costs ÷ Monthly Savings = Months to Break Even. If under 24-36 months and within your tenure, proceed. Homejourney's refinance calculator automates this with Singpass integration for accurate inputs.

1. Gather Current Loan Details: Note monthly payment, interest rate, remaining tenure. E.g., S$1M loan at 3.5% (S$4,470/month, 25 years left).
2. Find New Rates: Use Homejourney to compare; suppose new rate 3.0% drops payment to S$4,220/month. Savings: S$250/month.
3. Estimate Costs: Legal S$3,000 + Valuation S$800 + Processing S$200 = S$4,000. Subtract rebates (e.g., S$2,300 from some banks[3]). Net: S$1,700.
4. Calculate Break-Even: S$1,700 ÷ S$250 = 6.8 months. Worth it!
5. Project Total Savings: S$250 x (remaining months - break-even). Verify with calculator.

This method aligns with MAS guidelines and ABS consumer guides[2]. For HDB loans, add CPF usage checks via Homejourney.

Understanding SORA and Current Rate Trends

SORA is Singapore's key benchmark, replacing SOR/SIBOR. Track live 3M/6M SORA on Homejourney to time refinancing when rates dip. Promos start at 1.35%-1.78% fixed for Year 1-3 across banks like DBS and OCBC[3].

The chart below shows recent interest rate trends in Singapore:

As seen, rates stabilized post-2025 peaks, making now ideal for refinancing if post-lock-in. Compare packages on Homejourney's platform where banks compete via one application[3].

Real Singapore Example: Is Refinancing Worth It?

Meet Mr. Tan, owner of a S$1.2M Tampines resale HDB (valuation S$1.3M). Current DBS loan: S$900k at 3.8% (S$4,200/month, 22 years left). Spots UOB promo: 3M SORA +0.70% (~3.2%), new payment S$3,900/month. Savings: S$300.

Costs: Legal S$3,200 (net S$900 post S$2,300 rebate), valuation S$600. Total net S$1,500. Break-even: 5 months. Annual savings: S$3,600. Over 20 years: ~S$60k saved. Insider tip: Apply via Homejourney for multi-bank offers and Singpass speed-up.

Similar for private condos in Punggol or Sengkang—use our projects directory for valuationsHidden Costs of Refinancing: What You Must Calculate Before Switching Banks .

Hidden Costs and Risks to Watch

Beyond basics: Clawback if rates rise soon, processing delays (4-8 weeks), TDSR impact. HDB requires minimum 20% payment from cash/CPF. Rebates cover most but confirm per bank[1][3].

Strategies: Negotiate via Homejourney's brokers for extra rebates; time post-SORA drop. See our deep dive on Hidden Costs of Best Banks for Mortgage Refinancing You Need to Know | Homejourn... . Disclaimer: This is educational; consult professionals for advice.

Actionable Steps to Refinance Safely with Homejourney

• Track SORA on Homejourney dashboard.
• Use refinance calculator for scenarios.
• Submit one app to DBS, OCBC, UOB etc. via Singpass.
• Compare offers, pick best (e.g., free conversion after 24 months[1]).
• Prepare docs: Title deed, income proofs, Singpass-ready.

Timeline: Enquiry to disbursement 6 weeks. Post-refi, maintain via aircon services for property value. Link to repricing vs refinancing: Refinancing vs Repricing: Which is Better for You? Homejourney .

FAQ: How to Calculate If Refinancing is Worth It

Q: What is refinance break-even?
A: Months until savings cover costs. Aim under 24 months.

Q: Are there refinancing costs in Singapore?
A: Yes, S$2k-S$5k net after rebates. Use Homejourney calculator.

Q: Should I refinance my HDB loan now?
A: If savings > costs and post-lock-in, yes. Check rates.

Q: Best banks for refinancing 2026?
A: Compare DBS, UOB, OCBC on HomejourneyBest Banks for Mortgage Refinancing Singapore 2026 | Homejourney .

Q: How does Homejourney help?
A: Free calculator, multi-bank apps, real-time SORA—safe and simple.

Ready to see if refinancing is worth it? Start with Homejourney's bank rates comparison and calculator today. For full home loan strategies, read our pillar guide on Singapore mortgages. Trust Homejourney for verified, transparent property decisions.

References

1. Singapore Property Market Analysis 1 (2026)
2. Singapore Property Market Analysis 3 (2026)
3. Singapore Property Market Analysis 2 (2026)