Lock-in Period Explained: Complete Mortgage Guide for Singapore Buyers

Executive Summary

A lock-in period is a fixed timeframe during which you cannot refinance, repay, or sell your property without incurring significant financial penalties. In Singapore, most home loans come with lock-in periods ranging from 2 to 5 years, and understanding how they work is crucial to making informed decisions about your mortgage. This comprehensive guide walks you through everything you need to know about lock-in periods, early repayment penalties, refinancing strategies, and how to time your moves to maximize savings.

At Homejourney, we believe that informed borrowers make better financial decisions. That's why we've created this definitive resource to help you navigate lock-in periods with confidence, supported by current 2026 market data and practical examples tailored to Singapore's unique mortgage landscape.

What is a Lock-in Period?
Why Lock-in Periods Matter for Your Finances
Types of Lock-in Periods in Singapore
Early Repayment Penalties Explained
Fixed-Rate vs Floating-Rate Lock-in Periods
Refinancing Strategy: Timing Your Next Move
What Happens When Your Lock-in Period Ends
HDB Loans vs Bank Loans: Lock-in Period Differences
Current Lock-in Rates in Singapore (2026)
Frequently Asked Questions
Next Steps: How Homejourney Helps

What is a Lock-in Period?

A lock-in period is a contractual commitment period during which you are bound to your current mortgage terms and cannot make certain changes without paying penalties. Think of it as a mutual agreement between you and your lender: the bank locks in your interest rate at a specific level, and in return, you commit to maintaining the loan under those terms for a set duration.

During the lock-in period, your interest rate remains fixed and will not change regardless of market conditions. This provides payment certainty and protection against rising interest rates. However, this stability comes with restrictions on your flexibility to refinance, make early full repayments, or sell your property without financial consequences.

In Singapore's current mortgage market as of February 2026, most banks offer lock-in periods of 2 to 5 years. The most common option is a 2-year lock-in period, which balances rate certainty with reasonable flexibility for future financial decisions.

Why Lock-in Periods Matter for Your Finances

Understanding lock-in periods is essential because they directly impact three critical aspects of your mortgage journey: your monthly repayments, your ability to refinance when rates drop, and the total interest you'll pay over the life of your loan.

Payment Certainty During Uncertain Times

When you lock in a fixed rate, you know exactly what your monthly repayment will be for the duration of the lock-in period. This certainty is invaluable for budgeting and financial planning. If interest rates rise during your lock-in period—which happened frequently between 2022 and 2024 in Singapore—your repayment remains unchanged while borrowers on floating rates face increasing monthly costs.

The Cost of Inflexibility

The trade-off for this certainty is reduced flexibility. If market interest rates drop significantly during your lock-in period and you want to refinance to a lower rate, you'll face an early repayment penalty. This penalty can range from 1.5% to 3% of your outstanding loan amount, which on a S$500,000 mortgage could mean paying S$7,500 to S$15,000 just to exit your current loan early.

Strategic Timing Opportunities

Smart borrowers use lock-in periods strategically. The ideal time to refinance is approximately 3 months before your lock-in period ends. This allows you to lock in a new rate before your current fixed period expires, potentially avoiding penalties while capturing lower rates when they become available. During 2025, many Singapore homeowners took advantage of this strategy as mortgage rates fell from 3.1% at the start of the year to between 1.4% and 1.8% by late 2025.

Types of Lock-in Periods in Singapore

2-Year Lock-in Period

The 2-year lock-in is the most popular option among Singapore borrowers and is offered by virtually all major banks including DBS, OCBC, UOB, HSBC, and Standard Chartered. This period provides a reasonable balance between rate certainty and flexibility. After 2 years, you can refinance without penalties, making this ideal for borrowers who anticipate potential life changes or want to capitalize on falling rates within a reasonable timeframe.

3-Year Lock-in Period

Some borrowers opt for 3-year lock-in periods when they want longer-term certainty but don't need the full 5-year commitment. This option is less common than 2-year terms but offers slightly better rates in some cases, as banks reward longer commitments with modest rate discounts.

5-Year Lock-in Period

The 5-year lock-in period provides maximum rate certainty and is attractive to borrowers who plan to stay in their property long-term and want to minimize the number of refinancing decisions they'll need to make. Banks typically offer competitive rates for 5-year commitments, though you sacrifice significant flexibility during this extended period.

Hybrid and Flexible Options

Some banks now offer hybrid structures where you can make partial repayments or switch packages after a shorter initial lock-in period (often 1 year) without penalty, though full refinancing may still carry restrictions. These options provide more flexibility but often come with slightly higher interest rates compared to traditional fixed-rate packages.

Early Repayment Penalties Explained

What Are Early Repayment Penalties?

Early repayment penalties (also called lock-in penalties or redemption penalties) are fees charged by banks when you repay your loan in full before the lock-in period ends. These penalties exist because banks have calculated their profit margins based on receiving interest payments over the full lock-in period. When you repay early, they lose this anticipated interest income.

Standard Penalty Structure

In Singapore, the standard early repayment penalty is typically 1.5% of the outstanding loan amount. On a S$500,000 mortgage with S$450,000 still outstanding, this would cost you S$6,750 to exit the loan early. Some banks charge up to 3% for certain loan products, though 1.5% remains the most common rate across major lenders.

When Penalties Apply

Penalties apply when you:

Refinance to another bank during the lock-in period
Sell your property and use the proceeds to repay the loan
Make a full lump-sum repayment from your own funds or CPF
Switch from a fixed-rate package to a floating-rate package with the same bank (some banks charge a penalty for this)

Important Exception: Sale of Property

Many banks now offer penalty waivers or reductions when you sell your property during the lock-in period. This is a critical feature to check when comparing loan packages. Some banks waive the full 1.5% penalty if the sale is the reason for early repayment, while others offer a 50% waiver. A few banks, particularly for floating-rate loans, may waive the penalty entirely for property sales. When comparing offers on Homejourney's bank rates page, always verify the penalty terms for property sales specifically.

Fixed-Rate vs Floating-Rate Lock-in Periods

Fixed-Rate Mortgages: What You're Locking In

With a fixed-rate mortgage, your interest rate remains constant throughout the lock-in period, regardless of what happens in the broader economy. As of February 2026, fixed-rate mortgages in Singapore range from approximately 1.4% to 1.8%, depending on your loan amount and bank.

The primary advantage of fixed rates is predictability. You know your exact monthly repayment for 2-5 years, making budgeting straightforward. This is particularly valuable when you're stretching your finances to afford a property or when you believe interest rates may rise.

The disadvantage is that if rates fall significantly—as they did in 2025 when rates dropped from 3.1% to 1.4-1.8%—you're locked into a higher rate and must pay a penalty to refinance.

Floating-Rate Mortgages: The Flexibility Trade-off

Floating-rate mortgages are typically pegged to the Singapore Overnight Rate Average (SORA), which adjusts regularly based on market conditions. As of December 2025, SORA had fallen to 1.2%, its lowest level since August 2022, making floating rates particularly attractive for borrowers comfortable with payment variability.

Floating-rate mortgages often come with fewer restrictions during the lock-in period. Many banks offer penalty-free partial repayments and some even waive early repayment penalties entirely if you're selling the property. This flexibility comes at the cost of payment uncertainty—your monthly repayment can increase if SORA rises.

The chart below shows recent SORA trends to help you understand how rates have moved and how they might affect your floating-rate mortgage:

Which Should You Choose?

Fixed rates suit borrowers who prioritize payment certainty and believe rates may rise. Floating rates appeal to those comfortable with rate fluctuations and who want maximum flexibility during the lock-in period. Your choice should depend on your risk appetite, financial stability, and long-term plans. Homejourney's mortgage calculator can help you model both scenarios based on your specific situation.

Refinancing Strategy: Timing Your Next Move

The 3-Month Rule: Your Refinancing Window

The most important refinancing strategy in Singapore is the "3-month rule." Begin exploring refinancing options approximately 3 months before your lock-in period ends. This timing allows you to:

Lock in a new rate before your current fixed period expires
Avoid early repayment penalties
Capture lower rates if the market has improved
Have time to compare offers from multiple banks without rushing

For example, if your 2-year lock-in period ends on June 30, 2026, you should start refinancing conversations in late March 2026. This gives you time to receive quotes, conduct due diligence, and complete the application process before your lock-in expires.

Real-World Refinancing Example

Consider a borrower who took a fixed-rate mortgage at 3.0% in early 2025. By late 2025, rates had fallen to 1.6%. If they refinance before their lock-in period ends, they'd pay a 1.5% penalty on a S$450,000 outstanding balance (S$6,750). However, the rate reduction from 3.0% to 1.6% saves approximately S$600 per month on a S$500,000 mortgage. The penalty is recovered in just 11 months of lower repayments, making refinancing financially sensible.

Refinancing Costs to Consider

Beyond the early repayment penalty, refinancing involves other costs:

Legal and conveyancing fees: Typically S$500-S$1,000
Valuation fees: Usually S$300-S$800
Processing and administrative charges: S$200-S$500
Stamp duty: Approximately 0.15% of the loan amount

Total refinancing costs typically range from S$2,000 to S$5,000. When evaluating whether to refinance, ensure your interest rate savings exceed these costs within a reasonable timeframe (typically 12-24 months).

Using Homejourney for Refinancing Decisions

Homejourney's bank rates page allows you to compare current refinancing offers from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and other major lenders in one place. You can calculate your potential savings, understand the true cost of refinancing including all fees, and submit applications to multiple banks simultaneously to receive competitive offers. Our Singpass integration means your income, employment, and CPF data are verified instantly, accelerating the approval process.

What Happens When Your Lock-in Period Ends

Automatic Conversion to Floating Rate

When your fixed-rate lock-in period expires, your mortgage automatically converts to a floating rate unless you take action to refinance or re-fix. This is a critical moment that many borrowers overlook. Your bank will send you a notification (usually 30-60 days before the lock-in ends) informing you of the new floating rate that will apply.

The floating rate is typically calculated as SORA plus a bank spread. For example, if SORA is 1.2% and your bank's spread is 1.5%, your new floating rate would be 2.7%. This is significantly higher than the fixed rates currently available (1.4-1.8% as of February 2026).

Your Options at Lock-in Expiry

Option 1: Refinance to Another Bank

This is often the most financially advantageous option. You can refinance to a competing bank offering better rates without penalty. As of February 2026, many banks are offering 2-year fixed rates starting from 1.35% to 1.55%, significantly lower than the floating rates you'd face if you do nothing.

Option 2: Re-fix with Your Current Bank

Your existing bank may offer you a new fixed-rate package at competitive rates. Some banks offer "free package conversions" after the lock-in period ends, meaning you can switch to a new fixed-rate package without additional legal fees or valuation costs. UOB, for example, advertises free package conversion after the loan lock-in period expires.

Option 3: Accept the Floating Rate

If you believe interest rates will fall further and you're comfortable with payment variability, you can accept the automatic conversion to a floating rate. This provides flexibility to refinance later without penalty, but your monthly repayments will fluctuate with SORA movements.

Option 4: Make a Lump-Sum Repayment

Some borrowers use the lock-in expiry as an opportunity to make a significant lump-sum repayment using accumulated savings or CPF funds. This reduces the outstanding loan amount and, consequently, your monthly repayments on the new rate.

Timing Considerations

Don't wait until your lock-in period actually expires to make decisions. The ideal approach is to begin refinancing conversations 3 months before expiry. This gives you time to:

Receive and compare multiple offers
Negotiate better rates based on competing offers
Complete all documentation and approvals
Ensure your new loan is in place before the old lock-in expires

HDB Loans vs Bank Loans: Lock-in Period Differences

HDB Concessionary Loan Lock-in Terms

HDB (Housing and Development Board) offers concessionary loans with a fixed interest rate of 2.6% per annum, which is significantly lower than most bank rates. However, HDB loans come with stricter lock-in conditions. You cannot refinance to a bank loan until you've held the HDB loan for at least 5 years (for resale flats) or 10 years (for new flats).

The advantage is the lower rate. The disadvantage is the inflexibility—you're essentially locked in for a much longer period than bank loans, and you cannot take advantage of falling rates by refinancing to a bank.

Bank Loan Lock-in Terms

Bank loans typically offer lock-in periods of 2-5 years with more flexibility. Once your lock-in period ends, you can refinance to another bank without restrictions. Many borrowers compare HDB's 2.6% concessionary rate with bank rates below 2.6% and consider switching to a bank loan to gain flexibility, even if the rate is marginally higher.

HDB to Bank Refinancing Strategy

As of February 2026, many HDB borrowers are refinancing to bank loans at rates between 1.4% and 1.8%, substantially lower than HDB's 2.6%. While you lose the HDB loan's simplicity and fixed-rate certainty, you gain the flexibility to refinance again in 2-5 years if rates fall further.

Important consideration: Once you refinance from an HDB loan to a bank loan, you cannot return to the HDB concessionary rate in the future. This is a permanent decision that should be made carefully, considering your long-term plans and risk tolerance.

Current Lock-in Rates in Singapore (2026)

Fixed-Rate Mortgage Landscape

As of February 2026, Singapore's mortgage market continues to benefit from lower global interest rates. Fixed-rate mortgages are available from major banks at the following approximate ranges:

2-year fixed: 1.4% - 1.6%
3-year fixed: 1.5% - 1.7%
5-year fixed: 1.6% - 1.8%

These rates represent a dramatic decline from early 2025, when fixed rates were around 3.1%. The reduction reflects the Federal Reserve's rate cuts and Singapore's monetary policy adjustments through SORA movements.

Floating-Rate Benchmarks

Floating rates are pegged to SORA (Singapore Overnight Rate Average), which has fallen from 3.0% in early January 2025 to 1.2% as of December 2025. Most banks offer 3-month or 6-month SORA packages with spreads ranging from 1.3% to 1.8%, resulting in effective floating rates between 2.5% and 3.0%.

Promotional Rates and Special Offers

Banks are actively competing for refinancing business. Some promotional rates start from as low as 1.35% for 2-year fixed packages, though these often apply only to specific loan amounts or customer segments. When comparing offers on Homejourney's bank rates page, ensure you understand whether a quoted rate is a promotional rate (temporary) or a standard rate (lasting the full lock-in period).

Rate Outlook for 2026

The Federal Reserve has signaled a cautious approach to further rate cuts in 2026, with projections indicating only one quarter-point cut. This suggests Singapore mortgage rates may stabilize at current levels rather than decline significantly. Borrowers should not expect dramatic rate reductions and should refinance or lock in rates now if they believe current levels are attractive.

Frequently Asked Questions About Lock-in Periods

Q: Can I sell my property during the lock-in period?

A: Yes, you can sell your property during the lock-in period. However, when you sell, your loan must be repaid in full, which triggers the early repayment penalty unless your bank has a waiver for property sales. Many banks now waive or reduce the penalty when the sale is the reason for early repayment. Always verify this term when selecting your mortgage package.

Q: What if interest rates drop significantly during my lock-in period?

A: You have two options. First, you can pay the early repayment penalty (typically 1.5% of outstanding balance) and refinance to a lower rate. If the rate reduction is substantial enough, the savings will exceed the penalty within 12-24 months. Second, you can wait until your lock-in period ends to refinance without penalty. The choice depends on how much rates have fallen and how long you plan to keep the property.

Q: Is a longer lock-in period always better?

A: Not necessarily. A longer lock-in period (5 years vs 2 years) provides more rate certainty but sacrifices flexibility. If you anticipate selling your property, changing jobs, or needing to refinance within 5 years, a shorter lock-in period is preferable despite potentially higher rates. Conversely, if you plan to stay in your property long-term and want to minimize refinancing decisions, a longer lock-in period provides peace of mind.

Q: What's the difference between lock-in period and loan tenure?

A: These are different concepts. The lock-in period is the duration during which you cannot refinance without penalty (typically 2-5 years). The loan tenure is the total time you have to repay the entire loan, which is typically 25-30 years. You'll go through multiple lock-in periods during your loan tenure, refinancing 5-15 times over the life of your mortgage.

Q: Can I make partial repayments during the lock-in period?

A: This depends on your loan package and bank. Most fixed-rate packages allow penalty-free partial repayments (typically up to 10-20% of the original loan amount per year). Floating-rate packages usually offer more generous partial repayment options. Check your Letter of Offer or contact your bank to understand your specific terms.

Q: What happens if I refinance multiple times?

A: Each time you refinance, you enter a new lock-in period with a new bank. You'll pay refinancing costs (legal, valuation, stamp duty) each time, which typically range from S$2,000-S$5,000. Refinancing makes financial sense only when your interest rate savings exceed these costs within 12-24 months. Many borrowers refinance 3-5 times over a 30-year mortgage tenure as rates and personal circumstances change.

Q: Is it better to refinance before or after my lock-in period ends?

A: Ideally, refinance 3 months before your lock-in period ends. This allows you to lock in a new rate before the old one expires, avoiding the automatic conversion to a (typically higher) floating rate. You'll pay an early repayment penalty, but if rates have fallen, the savings will justify this cost. If rates haven't fallen, you can simply wait for your lock-in to expire and refinance without penalty.

Q: Can I negotiate my lock-in period with the bank?

A: Lock-in periods are standardized offerings (2, 3, or 5 years), and you cannot typically negotiate the length. However, you can negotiate the interest rate, especially if you have competing offers from other banks. Bring offers from Homejourney's bank rates comparison to your bank and ask if they'll match or beat the rate.

Q: What if I can't afford my repayments when my lock-in period ends and rates increase?

A: This is a genuine concern for borrowers who are already stretched financially. If rates rise significantly when your lock-in ends, your floating-rate repayment could increase substantially. To mitigate this risk: (1) refinance before your lock-in ends to lock in a new fixed rate, (2) consider a longer lock-in period (5 years) for more certainty, or (3) make lump-sum repayments during your lock-in period to reduce the outstanding balance. If you're already at the edge of affordability, consult a financial advisor before taking on a mortgage.

Q: How does CPF interact with lock-in periods?

A: You can use CPF to make monthly mortgage repayments throughout your loan tenure, including during lock-in periods. You can also use CPF to make lump-sum repayments during the lock-in period without triggering early repayment penalties (in most cases). However, using CPF for early full repayment to refinance may still incur penalties depending on your bank's terms. Verify this with your bank before planning CPF-funded early repayment.

Q: What's the relationship between lock-in periods and Total Debt Servicing Ratio (TDSR)?

A: TDSR is the maximum percentage of your gross monthly income that can go toward debt repayments (set at 60% by the Monetary Authority of Singapore). Your lock-in period doesn't directly affect TDSR calculations, but it does affect the interest rate used in TDSR calculations. Banks use the higher of your contracted rate or a stressed rate (typically current rates plus 2.5%) when calculating TDSR. A longer lock-in period doesn't change this calculation, but it does provide certainty that your actual repayments won't increase during the lock-in period.

Next Steps: How Homejourney Supports Your Mortgage Journey

Understanding Your Lock-in Period is Just the Beginning

Now that you understand lock-in periods, early repayment penalties, and refinancing strategies, you're equipped to make informed decisions about your mortgage. However, knowledge alone isn't enough—you need access to current market data, competitive rate comparisons, and a streamlined application process.

Step 1: Compare Current Rates

Visit Homejourney's bank rates page to view current lock-in rates from all major Singapore banks including DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, and more. Our rates are updated daily, ensuring you always see current market conditions. You can filter by loan amount, lock-in period, and property type to find packages that match your specific needs.

Step 2: Calculate Your Borrowing Power

Use Homejourney's mortgage eligibility calculator to understand how much you can borrow based on your income, existing debts, and CPF balance. This calculation considers TDSR limits and helps you avoid overextending financially. The calculator shows how different lock-in periods and interest rates affect your monthly repayments, helping you choose a package that fits your budget.

Step 3: Apply to Multiple Banks Simultaneously

Rather than visiting each bank individually, submit one application through Homejourney and receive offers from multiple lenders. Our Singpass integration means your income, employment history, and CPF data are verified instantly, accelerating the approval process. You'll receive competitive offers within days, allowing you to compare terms and negotiate better rates.

Step 4: Connect with Homejourney Mortgage Brokers

When you apply via Homejourney's bank rates page, you're connected with our experienced mortgage brokers who provide personalized guidance. They understand Singapore's unique mortgage landscape, can explain lock-in terms clearly, and help you navigate refinancing decisions. Our brokers prioritize your financial safety and ensure you understand all terms before committing.

Step 5: Make Your Decision with Confidence

Armed with competitive offers, clear calculations, and expert guidance, you can make a mortgage decision that aligns with your financial goals and risk tolerance. Whether you're a first-time buyer selecting your initial lock-in period or a homeowner timing your refinancing, Homejourney provides the tools and expertise to support every step of your journey.

Why Homejourney Stands Out

Homejourney is built on a foundation of user safety and trust. We verify all information to ensure you can make confident decisions. Our platform prioritizes transparency—you'll never encounter hidden fees or unclear terms. We actively listen to customer feedback and continuously improve our experience. Most importantly, we place your financial security above all else, ensuring that every recommendation and tool we provide genuinely serves your interests.

Start your mortgage journey with Homejourney today. Compare rates, calculate your borrowing power, and apply to multiple banks with confidence. Your dream home is within reach, and we're here to guide you every step of the way.