How to Calculate If Refinancing is Worth It: Homejourney Guide

To determine if refinancing your home loan is worth it, calculate the break-even point by dividing total refinancing costs by your monthly savings from the lower interest rate. If you plan to stay in your property longer than this period and rates are favorable, refinancing often makes financial sense for Singapore homeowners.

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. At Homejourney, we prioritize your safety and trust by verifying rates from DBS, OCBC, UOB, and more, helping you make confident decisions. Use our bank rates page to compare options securely.[2]

Refinancing Fundamentals in Singapore

Refinancing means switching your entire home loan to a new bank or package, often for better rates or to cash out refinance Singapore by extracting home equity. Unlike repricing, which stays with your current bank, refinancing can unlock cash rebates up to S$2,800 for loans over S$1.5M and access competitive packages from HSBC or Standard Chartered.[2]

Choose refinancing when lock-in periods end (typically 2-3 years) and SORA rates drop, or for equity cash out to fund renovations or investments. Repricing suits minor rate tweaks without switching banks. Always check Total Debt Servicing Ratio (TDSR) compliance via Homejourney's eligibility calculator at https://www.homejourney.sg/bank-rates#calculator.[1][7]

Key Costs and Savings to Factor In

Hidden costs include legal fees (S$1,500-S$3,000), valuation fees (S$500-S$1,500), and potential clawback penalties if within lock-in. New banks often subsidize these via cash rebates: DBS offers S$2,000-S$2,800, covering costs and more for minimum loans of S$500k.[2]

Net cost example: S$2,000 fees minus S$2,300 rebate = S$300 gain. Track these on Homejourney to ensure transparency. For full details, see our related article: Hidden Costs of Cash Out Refinancing Singapore: Homejourney Guide .

Step-by-Step: How to Calculate Break-Even Point

Follow these actionable steps to how to calculate if refinancing is worth it:

1. Current Payment: Note your existing monthly repayment. E.g., S$3,500 on S$800k loan at 3.5% over 25 years.[1]
2. New Payment: Get quotes via Homejourney's multi-bank submission. E.g., New rate 2.5% drops payment to S$3,200. Monthly saving: S$300.[2]
3. Total Costs: Legal S$2,000 + Valuation S$800 - Rebate S$2,300 = Net S$500.
4. Break-Even: Net costs ÷ Monthly saving = S$500 ÷ S$300 = 1.67 months. Recover costs in under 2 months![3]
5. Project Total Savings: Annual saving S$3,600 × Remaining years (23) = S$82,800, minus costs.

Use DBS or Citibank calculators for precision, but Homejourney aggregates them for DBS, OCBC, UOB, HSBC rates instantly.[1][3]

Understanding SORA and Current Rates

SORA (Singapore Overnight Rate Average) replaced SIBOR in 2021 as the benchmark for floating loans. Current top rates: 1.09%-1.78% fixed Year 1, then 3M SORA +0.25%-0.60%.[2][7]

The chart below shows recent interest rate trends in Singapore:

As seen, rates stabilized around 3% in 2026, making fixed-to-floating switches viable post-lock-in. Time refinancing when SORA dips; track live on Homejourney.[7]

Real Singapore Example: HDB vs Private Property

Take an HDB flat owner in Tampines with S$600k outstanding at 3.8%, paying S$2,800/month. Refinance to UOB 2.8% (Year 1 fixed 1.5%): New payment S$2,500, saving S$300/month. Net costs S$1,200 after S$2,000 rebate. Break-even: 4 months.

For private condo in Orchard, S$1.2M loan at 4%: Switch to Maybank package for S$4,200 saving annually post-rebate. Investors use cash out mortgage for term loan Singapore alternatives, extracting up to 75% LTV.[2]

Compare via Bank Rates . Related: Cash Out Refinancing Singapore: Homejourney Ultimate Guide .

Timing and Strategies for Maximum Savings

Refinance 3-6 months before lock-in ends to avoid penalties (1.5% of loan). Negotiate: Leverage Homejourney's multi-bank app—submit once via Singpass, get competing offers from CIMB, RHB, Public Bank.

Money-saving tips:

• Target loans >S$500k for best rebates (S$2,000+).[2]
• Combine with extract home equity for renovations; link to Aircon Services post-move.
• Monitor TDSR (60% max debt-to-income); use our calculator.

See Refinancing vs Repricing: Which is Better for You? Homejourney for vs repricing.

Homejourney Makes It Safe and Simple

At Homejourney, submit one application to all partners (DBS to Hong Leong), track SORA real-time, and get personalized broker advice. Our verified rates ensure trust—no branch hopping needed. Start at https://www.homejourney.sg/bank-rates.

Disclaimer: Calculations are estimates. Consult professionals; rates as of 2026 subject to change. Homejourney verifies data for your safety.[1][2]

FAQ: How to Calculate If Refinancing is Worth It

1. What is a good break-even period for refinancing in Singapore?
Under 12-18 months is ideal, factoring rebates. Use Homejourney calculator for your numbers.[3]

2. Can I cash out via refinancing for HDB flats?
Yes, up to LTV limits for cash out refinance Singapore. Check eligibility on our platform.[9]

3. How much rebate do banks offer?
S$2,000-S$2,800 for S$500k+ loans from DBS, OCBC. Compare on Homejourney.[2]

4. Is refinancing worth it if rates are similar?
Yes, if net rebate exceeds costs by S$500+, equating to 0.05% rate edge.[2]

5. How long does refinancing take?
2-4 weeks with Singpass via Homejourney; faster than manual.[1]

Ready to save? Calculate your potential with Homejourney's tools and link back to our pillar: Singapore Home Loans Complete Guide. Search properties at https://www.homejourney.sg/search.

References

1. Singapore Property Market Analysis 2 (2026)
2. Singapore Property Market Analysis 1 (2026)
3. Singapore Property Market Analysis 7 (2026)
4. Singapore Property Market Analysis 3 (2026)
5. Singapore Property Market Analysis 9 (2026)