Refinancing vs Repricing: Which is Better for You?
The choice between refinancing and repricing your home loan can save you thousands of dollars annually—or cost you more if you choose wrong. While both options allow you to switch to a lower interest rate, they work very differently, carry different costs, and suit different financial situations. Understanding these differences is crucial before you make a decision that will affect your finances for years to come.
Refinancing means switching to a completely new loan with a different bank, while repricing means changing to a different interest rate package within your existing bank.[1][4] The distinction matters because each path involves different costs, timelines, and potential savings. At Homejourney, we believe in empowering you with transparent information so you can make confident decisions about your largest financial commitment.
Understanding the Key Differences
Before diving into which option suits your situation, let's clarify what each process entails and how they differ fundamentally.
What is Refinancing?
Refinancing involves taking out a completely new loan from a different bank to pay off your existing loan.[4] The new bank becomes your lender, and your previous bank releases the title deed of your property. This process is particularly popular among HDB flat owners looking to switch from HDB concessionary loans to bank loans, which have become significantly cheaper in 2025 and early 2026.[1]
For example, HDB's concessionary loan rate stands at 2.6 percent, while bank loan packages have dropped to between 1.55 and 1.8 percent for fixed and floating rates.[1] This substantial difference has driven many homeowners to refinance. However, refinancing isn't free—you'll need to account for legal fees, valuation fees, and potentially other costs.
What is Repricing?
Repricing is simpler: you stay with your current bank but switch to a different interest rate package they offer.[1][4] Banks typically provide free switching to a different interest rate package within the bank after the lock-in period expires.[1] Since you're not changing banks, there's no conveyancing process, which means significantly lower administrative costs.
For instance, one homeowner repriced her mortgage with DBS, moving to a two-year fixed loan at 1.6 percent from her previous 3 percent rate, saving approximately S$500 monthly.[4] This demonstrates that repricing alone can deliver substantial savings without the complexity of refinancing.
Cost Comparison: What You'll Actually Pay
The financial difference between refinancing and repricing is significant and should heavily influence your decision. Understanding these costs upfront helps you calculate whether the interest savings justify the refinancing expenses.
Repricing Costs
Repricing fees are minimal, typically ranging from $300 to $1,000 in administrative fees depending on your bank.[2] This is the main advantage of repricing—you can switch to a better rate package with minimal out-of-pocket expense. Most banks now offer free repricing options after the lock-in period expires, making this an attractive option for those seeking simplicity.
Refinancing Costs
Refinancing involves two primary cost categories:[2]
- Legal fees: For HDB properties, legal fees range from $1,500 to $2,000, while private properties incur $1,800 to $2,000 in legal costs. These fees cover conveyancing—the process of transferring the title deed from your old bank to the new bank.
- Valuation fees: Banks require a formal valuation report to assess your property's current market value. For HDB properties, this typically costs $150 to $200, while private properties may incur $150 to $700 depending on the property value.
However, there's significant relief available: for HDB properties with outstanding mortgages exceeding $200,000, banks typically provide full subsidies for all refinancing fees.[2] This is a game-changer for many HDB owners, effectively eliminating the cost barrier to refinancing.
Beyond these direct costs, be aware of potential clawback charges if you prepay your existing loan within the lock-in period, and fire insurance premiums will apply regardless of which option you choose.[2]
Current Interest Rate Environment (January 2026)
The interest rate landscape has shifted dramatically in favor of borrowers. Understanding current rates helps you assess how much you could save.
As of early 2026, floating-rate packages linked to SORA (Singapore Overnight Rate Average) have dropped to historic lows, with three-month SORA rates at 1.34 percent—the lowest in three years.[1] The most popular loan packages include two-year fixed-rate loans at 1.48 percent with free conversion after the first year, and three-year fixed-rate loans at 1.5 percent.[1]
The chart below shows recent SORA trends to help you understand how rates have moved:
This rate environment represents a significant opportunity for homeowners locked into older loans at 3 to 4 percent rates. However, experts caution that much of the rate decline has already occurred, and further drops are likely to be modest given current macroeconomic conditions.[1]
When to Choose Repricing
Repricing makes the most sense in specific situations. Consider repricing if:
- Your current bank offers competitive rates: If your existing bank's repricing package matches or beats what competitors offer, there's no reason to incur refinancing costs.
- You value simplicity and speed: Repricing is faster and requires minimal documentation compared to refinancing. If you prefer a hassle-free process, repricing wins.
- You don't have time for extensive research: If you need to act quickly and your current bank's offer is reasonable, repricing avoids the comparison shopping required for refinancing.
- You want to maintain banking relationships: Some customers prefer staying with their existing bank for convenience, especially if they have other products like savings accounts or credit cards there.
- Your savings are modest: If the interest rate difference between your current rate and available repricing rates is small, the refinancing costs may not justify the switch.
However, you must ensure that you'll achieve meaningful interest savings—repricing only makes sense if the new rate is noticeably lower than your current rate.[2]
When to Choose Refinancing
Refinancing becomes the better choice when the potential savings outweigh the costs and when you need specific features your current bank doesn't offer.
- Switching from HDB to bank loans: This is currently the most compelling refinancing scenario. HDB's 2.6 percent rate versus bank rates of 1.5 to 1.8 percent creates substantial savings that easily justify refinancing costs, especially with fee waivers for loans above $200,000.[1][2]
- You need specific loan features: Banks offer more flexible features than HDB loans, including partial repayment without penalty, waiver of penalties when selling, and interest offset accounts.[2] If your current bank doesn't offer these, refinancing provides access to them.
- Significant interest rate differences: If you're locked into a 3 to 4 percent rate and can refinance at 1.5 to 1.8 percent, the monthly savings quickly offset refinancing costs.
- You want to maximize savings: Refinancing gives you freedom to choose from multiple banks and interest rate types (fixed, floating, SORA-linked) without being confined to your current bank's limited offerings.[2]
- You plan to stay in your property long-term: Refinancing makes more financial sense if you'll benefit from the lower rate for several years, allowing the monthly savings to accumulate.
The Break-Even Analysis: Does Refinancing Pay Off?
Before refinancing, calculate whether your interest savings will exceed the refinancing costs. Here's how to think about it:
Break-even calculation: Divide your total refinancing costs by your monthly interest savings. This tells you how many months it will take for savings to offset costs. For example, if refinancing costs $3,000 and you save $200 monthly, your break-even point is 15 months. If you plan to stay in your property for at least 2-3 years beyond the break-even point, refinancing is financially sound.
Consider using Homejourney's refinancing calculator to model different scenarios before you commit. You can compare rates from DBS, OCBC, UOB, HSBC, Standard Chartered, and other major banks in one place, making it easier to assess your potential savings.How to Calculate If Refinancing is Worth It | Homejourney
Special Considerations for HDB Owners
HDB flat owners face a unique decision point that deserves special attention. Once you refinance from an HDB loan to a bank loan, you cannot switch back to an HDB loan in the future.[1][5] This permanent decision requires careful consideration.
However, the financial case for refinancing is compelling: HDB owners whose loans originated in 2023 and 2024 at 3 to 4 percent rates can refinance at 1.5 to 1.8 percent—a difference of 1.5 to 2.5 percentage points.[1] For a $300,000 loan, this translates to $4,500 to $7,500 in annual savings. With full fee waivers available for loans above $200,000, the financial barrier to refinancing has essentially disappeared.[2]
Refinancing activity among HDB owners has picked up significantly since early 2025, with banks reporting increased demand.[1] If you're an HDB owner considering this move, the current environment—with competitive rates, fee subsidies, and flexible features like free conversion options—represents an excellent opportunity.
Banks' Promotional Offers: What's Available Now
Competition among banks has intensified, creating favorable conditions for borrowers. Beyond lower base rates, banks are offering attractive incentives:
- Cash rebates: Many banks provide cash rebates to offset refinancing costs, effectively reducing your net expenses.
- Legal fee subsidies: Full or partial waivers of legal fees are increasingly common, especially for larger loan amounts.
- Flexible conversion options: Some packages include free conversion or free repricing after the first year, giving you flexibility if rates change.[1]
- Interest offset accounts: Certain banks offer accounts where savings deposits offset your mortgage interest, reducing your effective borrowing cost.
The most popular packages currently include two-year fixed-rate loans at 1.48 percent with free conversion after the first year, and three-month SORA-linked floating rates at 1.34 percent.[1] These promotional features change frequently, so comparing current offers across banks is essential before deciding.
Timing Your Decision: Lock-In Periods and Rate Trends
The timing of your refinancing or repricing decision significantly impacts your financial outcome. Here's what you need to know:
Lock-in periods: Most mortgages have lock-in periods (typically 2-3 years) during which early repayment incurs penalties. You should start exploring refinancing or repricing options approximately 4 months before your lock-in period expires.[3] This gives you time to compare options without triggering prepayment charges.
Rate trend outlook: While interest rates have fallen to three-year lows, experts believe the bulk of the decline has already occurred, with further drops likely to be modest.[1] This suggests acting sooner rather than later if you're considering refinancing. Refinancing activity is expected to remain healthy through mid-2026, but could moderate afterward as borrowers who locked in at higher rates in 2023-2024 complete their refinancing.[1]
Track real-time SORA rates on Homejourney to time your decision perfectly. Understanding whether rates are trending up or down helps you decide between fixed-rate packages (which lock in current rates) and floating-rate packages (which benefit if rates continue falling).
How Homejourney Makes Your Decision Easier
Navigating refinancing and repricing options can feel overwhelming. Homejourney simplifies this process by providing tools and guidance designed specifically for Singapore borrowers:
- Compare rates from multiple banks: View current refinancing rates from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, and other major banks on our bank rates page. No need to visit multiple branches or websites.
- Calculate your potential savings: Use our refinancing calculator to input your current loan details and see exactly how much you could save with different refinancing scenarios.
- Submit one application to all banks: Instead of visiting branches one by one, submit a single refinancing application through Homejourney and receive offers from multiple banks simultaneously. Let banks compete for your business.
- Instant verification via Singpass: Apply using Singpass to auto-fill your application in seconds, speeding up the approval process.
- Track live SORA rates: Monitor three-month and six-month SORA rates in real-time to understand the interest rate environment and time your decision strategically.
Visit Best Bank Refinancing Rates Comparison 2026 | Homejourney to compare current refinancing rates and understand which banks are offering the best deals for your situation.
Decision Framework: Your Quick Reference Guide
Use this framework to determine which option suits your situation:
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