How to Calculate If Refinancing is Worth It: Homejourney Guide

To determine if refinancing is worth it, calculate your break-even point by dividing total refinancing costs by monthly savings from the new lower rate. If the break-even period is shorter than your remaining loan tenure, it's financially beneficial—use Homejourney's tools for precise Singapore-specific calculations.

This cluster article on how to calculate if refinancing is worth it builds on our pillar guide, Mortgage Refinancing Singapore 2026: Homejourney's Definitive Guide, providing tactical steps for property owners eyeing mortgage refinancing Singapore.

Refinancing vs Repricing: Key Differences

Refinancing switches your home loan to a new bank for better rates or terms, while repricing negotiates with your current bank. Refinancing often yields lower rates but incurs costs like legal fees (S$2,000–S$3,000) and valuation (S$500–S$1,000); repricing avoids these but may offer less competitive deals[1][2].

For HDB flats or private properties, check lock-in periods—most are 2–3 years. Learn more in our detailed comparison: Refinancing vs Repricing: Which is Better for You? Homejourney . Homejourney prioritizes your safety by verifying all rates from partners like DBS, OCBC, and UOB.

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

Follow these actionable steps to assess when to refinance your refinance home loan.

Gather Current Loan Details: Note your outstanding principal, interest rate, monthly payment, and remaining tenure. Example: S$800,000 loan at 3.5% p.a., 20 years left, S$4,500/month.
Compare New Rates: Use Homejourney's bank rates page at https://www.homejourney.sg/bank-rates to compare DBS (1.40% fixed Year 1), UOB (3M SORA +0.70%), OCBC, HSBC, and more[1][3]. Assume new rate: 2.5% p.a., new payment: S$3,900/month—saving S$600/month.
Calculate Costs: Legal fees S$2,500, valuation S$500, possible clawback 1.5% if in lock-in. Total costs: S$5,000. See hidden costs details: Hidden Costs of Mortgage Refinancing You Need to Know | Homejourney .
Compute Break-Even: Break-even months = Total costs / Monthly savings = S$5,000 / S$600 = 8.3 months. If >20 years left, refinance saves thousands long-term.
Factor Cash Rebates: Banks like UOB offer S$2,000–S$2,500 for S$450k+ loans, reducing net costs to S$2,500—break-even drops to 4 months[1].

Try Homejourney's refinancing calculator at https://www.homejourney.sg/bank-rates#calculator for instant results with Singpass integration.

Understanding SORA and Current Rates

SORA (Singapore Overnight Rate Average) is Singapore's key benchmark, with 3M compounded SORA around 2.8–3.0% in 2026. Most loans are SORA + margin (e.g., +0.60%–1.00% after initial fixed periods)[1][3].

The chart below shows recent interest rate trends in Singapore:

As seen, rates have stabilized post-2025 peaks, making now ideal for fixed-to-floating switches if your rate exceeds 3.5%. Track live SORA on Homejourney for perfect timing.

Real Singapore Example: Is Refinancing Worth It?

Meet Mr. Tan, owner of a S$1.2M condo in Punggol. Current DBS loan: S$900k at 3.8%, S$5,200/month, 22 years left. Refinances to UOB at 2.8% (Year 1: 3M SORA +0.70%), new payment S$4,400—S$800 savings.

Costs: S$3,000 legal + S$500 valuation - S$2,500 rebate = S$1,000 net. Break-even: 1.25 months. Annual savings: S$9,600. Over 20 years: S$160,000+ (less principal adjustments). Insider tip: Punggol resale values rose 5% in 2025 per URA data, boosting equity for better LTV[1].

Submit one application via Homejourney to DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and others—let banks compete.

Hidden Costs and Risks in Mortgage Refinancing Singapore

Beyond basics: Processing fees (S$200–S$500), discharge fees (S$300), and 1.5% penalty if breaking lock-in early. HDB flats add admin fees. Total often S$4,000–S$7,000 without rebates[3].

TDSR (60% debt cap) and LTV limits apply—use Homejourney's eligibility calculator. Disclaimer: This is general advice; consult professionals. Homejourney verifies data for trust.

When to Refinance: Timing Tips

6–12 months before lock-in ends to avoid penalties.
When SORA drops >0.5% below your rate.
Pair with property upgrades—search via https://www.homejourney.sg/search.
Avoid if <2 years left or selling soon.

Compare best rates: Best Bank Refinancing Rates Comparison 2026: Homejourney Guide .

Money-Saving Strategies with Homejourney

Negotiate via multi-bank apps on Homejourney—receive offers from 10+ banks instantly. Use Singpass for fast verification. Post-refinance, maintain with Aircon Services . Brokers guide free via https://www.homejourney.sg/bank-rates.

FAQ: Mortgage Refinancing Singapore

Q: How long does refinancing take in Singapore?
A: 3–6 weeks for private properties, 4–8 for HDB. Homejourney speeds it with one-click multi-bank submission.

Q: What documents for refinancing?
A: NRIC, title deed, payslips, tax assessment. Singpass auto-fills on Homejourney.

Q: Repricing vs refinancing—which saves more?
A: Refinancing typically 0.2–0.5% lower rates, but calculate costs first. Details: Refinancing vs Repricing: Which is Better for You? Homejourney Guide .

Q: Are cash rebates real?
A: Yes, e.g., UOB S$2,500 for S$1M+ loans[1]. Homejourney lists verified offers.

Q: Is refinancing worth it for HDB flats?
A: Yes if savings exceed costs and tenure allows—check HDB rules.

Ready to save? Start with Homejourney's refinancing calculator and bank comparisons at https://www.homejourney.sg/bank-rates. For full refinancing guide, visit our pillar: Mortgage Refinancing Singapore 2026: Homejourney's Definitive Guide . Homejourney ensures safe, transparent decisions.