How to Calculate If Refinancing is Worth It: Homejourney Guide

Refinancing your home loan is worth it if your break-even period—the time to recover upfront costs through monthly savings—is shorter than your remaining loan tenure, typically calculated by dividing total refinancing costs by the monthly payment reduction.

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, Standard Chartered, and more while factoring in real Singapore costs like legal fees and clawbacks.

Why This Matters in Our Comprehensive Singapore Mortgage Guide

This cluster article dives deep into the math behind refinancing decisions, building on our pillar content, 新加坡房贷再融资完整指南2026：Homejourney权威指南 ">Singapore Mortgage Refinancing Complete Guide 2026.

As Singapore's trusted platform prioritizing user safety and transparency, Homejourney verifies all data to help you make confident choices without hidden surprises.

With SORA rates fluctuating, knowing how to calculate if refinancing is worth it can save you thousands—let's break it down with real examples.

Refinancing Fundamentals: Repricing vs Full Refinancing

Refinancing means switching to a new lender for better rates or terms, while repricing stays with your current bank. Choose refinancing when new banks offer lower rates or cash rebates exceeding costs; opt for repricing if lock-in penalties are low and your bank matches market rates.

In Singapore, HDB flats have specific rules under the Housing & Development Board (HDB), while private properties follow Monetary Authority of Singapore (MAS) guidelines on Loan-to-Value (LTV) limits.

Read more in our related guide: 再融资vs重新定价：哪个更适合你？Homejourney指南 ">Refinancing vs Repricing: Which is Better?.

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

Follow these actionable steps to determine if refinancing pays off, using real Singapore numbers for a $1 million loan with 20 years left.

Gather Your Current Loan Details: Note monthly payment, interest rate (e.g., 3.5% SORA + 0.7% spread), and remaining tenure. Use DBS's repayment calculator for accuracy[1].
Find New Rates on Homejourney: Compare live rates from DBS (3.2% package), OCBC (3.15%), UOB (3.1%) at https://www.homejourney.sg/bank-rates. Assume new rate drops to 3.0%, reducing monthly payment from $5,500 to $5,200—a $300 savings.
Calculate Total Costs: Legal fees ($1,600 HDB/$1,800 condo), valuation ($200/$400), possible clawback (3 months interest, ~$7,500). Total: ~$10,000 for HDB, offset by bank rebates up to $2,000[3].
Compute Break-Even: Divide costs by monthly savings: $10,000 / $300 = 33 months (2.75 years). If >10 years left on loan, it's worth it.
Project Total Savings: Over 20 years, $300 x 240 months = $72,000 minus $10,000 costs = $62,000 net savings.

Plug these into Homejourney's tool for instant results—submit one application via Singpass to all banks and let them compete.

Understanding SORA and Interest Rate Triggers

SORA (Singapore Overnight Rate Average) is the key benchmark for floating loans in Singapore, published daily by ABS. A drop of 0.5% or more, or when your rate exceeds market by 0.3%, triggers refinancing evaluation—known as the interest rate trigger.

The chart below shows recent interest rate trends in Singapore:

As seen in the chart, if 3M SORA dips below 2.8% (as of Feb 2026), compare packages now. Track live on Homejourney to time your move perfectly.

Hidden Costs and When to Refinance Mortgage

Lock-in period end is ideal—start sourcing 3-6 months early to lock rates[3]. Factor clawbacks if within penalty period (1.5% of loan or 3 months interest).

Legal/Valuation: $1,800-$2,200 condo; rebates often cover 100%[3].
Prepayment fees: Avoid by timing post-interest reset.
TDSR impact: Ensure new loan fits 55% debt ratio.

For HDB, check CPF usage limits via CPFB calculator[6]. See Hidden Refinancing Costs & Best Timing: Homejourney Guide ">Hidden Refinancing Costs Guide for details.

Homejourney verifies all fees upfront for your safety.

Best Time to Refinance: Timing Strategies

The best time refinance aligns with lock-in period end, falling rates, or personal milestones like income rise. In upcycles, lock fixed rates early; downturns favor SORA floats.

Refinance timing tip: Monitor via Homejourney's real-time SORA tracker. For 2026, with potential rate cuts, act before Q3 per market outlook.

Real example: Seng, Tampines HDB owner, refinanced $800k loan post-lock-in from 4% to 3.2% via Homejourney, breaking even in 24 months, saving $40k over tenure.

Negotiate Better Deals and Money-Saving Tips

Leverage Homejourney's multi-bank submission: One form gets offers from DBS, OCBC, UOB, HSBC, etc. Negotiate by pitting quotes (e.g., "OCBC offers 0.05% lower—match?")[3].

Aim for cashback $1,500+ to offset costs.
Combine with property search on https://www.homejourney.sg/search for upgrades.
Use post-refi savings for maintenance like Aircon Services ">aircon services.

Disclaimer: This is general advice; consult Homejourney Mortgage Brokers for personalized guidance. Rates as of Feb 2026; subject to change per MAS rules.

FAQ: Common Questions on Refinancing Calculations

Q: When to refinance mortgage in Singapore?
A: At lock-in end, rate drops >0.3%, or break-even < remaining tenure. Use our guide: When to Refinance Home Loan in Singapore: Homejourney Guide ">When to Refinance.

Q: What are typical refinancing costs for HDB?
A: $1,600 legal + $200 valuation, often rebated. Calculate precisely on Homejourney.

Q: How does Homejourney help with refinancing?
A: Compare rates, calculate savings, apply to all banks via Singpass at https://www.homejourney.sg/bank-rates.

Q: Is refinancing worth it for short tenures?
A: Only if break-even <3 years; otherwise, repricing suffices.

Q: Best banks for refinancing 2026?
A: Compare DBS, OCBC, UOB on Homejourney: Best Bank Refinancing Rates Comparison 2026: Homejourney Guide ">2026 Rates Comparison.

Ready to see your savings? Visit Homejourney's refinancing calculator today. For full coverage, check our pillar guide on Singapore mortgage refinancing. Homejourney: Your safe path to smarter property decisions.