When Is the Right Time to Refinance Your Home Loan? | Homejourney Guide

Knowing when to refinance your home loan in Singapore can save you tens of thousands of dollars over your loan tenure, but refinancing at the wrong time can wipe out your savings through penalties and fees.

This definitive Homejourney guide explains when to refinance mortgage packages, how to read your lock-in period, what interest rate triggers to watch, and how to calculate if you should switch today or wait. It is written specifically for Singapore HDB and private property owners who want a safe, transparent framework to decide the best time to refinance.

Executive Summary: Quick Answer on Refinancing Timing
Chapter 1: Refinancing Basics in Singapore
Chapter 2: The 5 Key Signals It’s Time to Refinance
Chapter 3: Lock-in Periods, Clawbacks & Ideal Refinance Windows
Chapter 4: Interest Rates, SORA & Market Timing
Chapter 5: Break-even Calculation & Real Singapore Examples
Chapter 6: Step-by-Step Refinancing Process in Singapore
Chapter 7: Money-Saving & Risk-Management Strategies
Chapter 8: Timing Tips for Different Borrower Profiles
Chapter 9: How Homejourney Helps You Time Refinancing Safely
FAQs: Common Questions on When to Refinance Your Home Loan

Executive Summary: When Is the Right Time to Refinance Your Home Loan?

If you only read one section, use this rule-of-thumb checklist for refinance timing in Singapore:

Refinance Timing Rule	What It Means in Practice
1. 3–6 months before lock-in period end	This is usually the best time to refinance, so your new loan kicks in right after your current lock-in ends, avoiding both penalties and high "reversion" rates.[2][3][5]
2. When new rates are at least ~0.50–0.70% lower	If the new package is at least about 0.50–0.70 percentage points lower than your current effective rate, refinancing is often worth evaluating, depending on loan size and fees.[1][2]
3. When you have ≥ S$300k loan balance & ≥ 10 years left	Larger outstanding loans and longer remaining tenures increase the savings from a lower rate, helping you recover legal and valuation costs faster.[1]
4. After lock-in AND cash rebate clawback periods	Most bank letters state a 2–3 year lock-in; some also claw back legal subsidies if you leave within 3 years.[5] The safest window is after both have expired.
5. When your income, credit score & TDSR are strong	Refinancing is easier and cheaper when your financial profile is stable, your CPF/HDB/IRAS records are clean, and your TDSR is below MAS limits.[1]

From living in Singapore estates like Tampines and Bukit Batok, I’ve seen many owners panic-refinance only after they receive a surprise letter that their fixed rate has ended and their new rate is jumping to a much higher “board” or floating rate. By that time, they have less than a month to react, which is too late, as a typical refinancing process can take around 8–13 weeks to complete.[1][2]

The safest approach is to start evaluating options on Homejourney about 6 months before your lock-in period end, compare rates from DBS, OCBC, UOB, HSBC, Standard Chartered and other banks via Bank Rates , and run your break-even using the refinancing calculator at Mortgage Rates before you commit.

Chapter 1: Refinancing Basics in Singapore

Refinancing vs Repricing: Clear Definitions

In Singapore, refinancing means switching your home loan from your current bank to a different bank, usually to secure better interest rates or terms.[1][2] It involves a new loan agreement, fresh legal work, and often a new valuation of your property.

Repricing means switching from one package to another within the same bank, for example from a 2-year fixed rate to a SORA-pegged package with DBS or OCBC.[2] It normally involves less paperwork, no change of law firm, and lower fees.

Feature	Refinancing (Bank A → Bank B)	Repricing (Within Same Bank)
Who is the lender?	New bank (e.g. move from Bank A to Bank B)	Same bank (change package only)
Typical processing time	~8–13 weeks, including legal & valuation[1][2]	~3–6 weeks, sometimes faster[2]
Costs	Legal & valuation; often subsidised by new bank[1][2]	Usually admin fee only (few hundred dollars)[2]
Package choices	Many options across all banks	Limited to existing bank’s current packages[2]
When it makes sense	Big rate gap, poor current bank offers, high loan size	Small rate improvement needed, want minimal hassle

As a homeowner, your first decision is often not "Should I refinance?" but "Refinance vs repricing – which is better for me now?" For a deeper comparison, see Refinancing vs Repricing: Which is Better for You? Homejourney .

How Refinancing Works in Singapore (High-Level)

The refinancing process in Singapore is structured and tightly regulated, with banks following MAS guidelines and standard conveyancing practices.[1]

At a high level:

You apply for a new loan with another bank (e.g. switch from Bank A to DBS/OCBC/UOB).
The new bank approves your loan, subject to valuation and legal checks.
A law firm is appointed to discharge your old mortgage and register the new one.
On completion, the new bank pays off your old loan, and you start paying instalments to the new bank.

This entire process typically takes around 8–13 weeks from application to completion.[1][2] That timing is crucial when you plan your refinance timing around your lock-in period end.

Chapter 2: The 5 Key Signals It’s Time to Refinance

1. Your Lock-in Period Is Ending Within 6 Months

Most home loans in Singapore have a lock-in period of around 2–3 years, during which you pay a penalty (commonly 1.5% of outstanding loan) if you redeem your loan or refinance.[2][3][5] Banks and brokers often advise that the ideal time to start exploring refinancing is about 3 months before lock-in ends, but in practice, 4–6 months offers a more comfortable buffer.[3]

From experience talking to owners in Sengkang and Pasir Ris, starting only 1–2 months before expiry often results in a rushed decision or missing your preferred package because legal work cannot complete in time. Homejourney encourages users to set a reminder in their calendar for “6 months before lock-in end” and start comparing via Bank Rates then.

2. Your Current Rate Has Reverted to a Much Higher Rate

After your initial promotional/fixed period, your loan typically shifts to a "reversion" rate that can be significantly higher than current market packages.[2][3] For example, a loan that was 1.8% may jump to 3.3% or more, depending on the bank’s board or spread.

If the rate difference between your existing package and the best current packages is about 0.50–0.70 percentage points or more, that is a key interest rate trigger to recalculate your savings and consider refinancing.[1][2]

3. You Have a Large Outstanding Loan and Long Remaining Tenure

Refinancing benefits are greatest when:

Outstanding loan ≥ about S$300,000
Remaining loan tenure ≥ 10 years

That combination means more interest will be paid in future, so a lower rate makes a bigger difference and helps you recover legal/valuation fees faster.[1]

4. Your Financial Profile Has Improved

Banks reassess your eligibility during refinancing — they look at your income, Total Debt Servicing Ratio (TDSR), credit history, and Loan-to-Value (LTV) based on the current property value.[1] If your income has risen, other debts dropped, or your credit score improved, you may now qualify for better rates or a better structure (e.g. shorter tenure) than when you first took the loan.

5. You Want to Change Loan Structure (Fixed vs SORA, Tenure, Cash-out)

Refinancing is also the right move when your needs have changed – not just the interest rate:

Switching from a fixed rate to a 3M or 6M SORA-pegged loan if you believe rates will fall.
Moving from a volatile floating package to a fixed rate to stabilise cash flow.
Shortening tenure to pay off your loan faster, or lengthening tenure to reduce monthly instalments during a tight cashflow period.
Considering cash-out refinancing to tap home equity (subject to MAS/HDB rules) for renovation or investment.[7]

Chapter 3: Lock-in Periods, Clawbacks & Ideal Refinance Windows

Understanding Lock-in Periods

The lock-in period is usually clearly stated in your letter of offer; common ranges are 2–3 years for private bank loans and certain HDB bank loans.[2][3][5] If you redeem or refinance during this period, you pay a penalty, usually a fixed percentage of your outstanding loan (e.g. 1.5%).

Example: If your outstanding loan is S$600,000 and the penalty is 1.5%, you would pay S$9,000 in penalty — this can easily wipe out the benefit of refinancing unless the rate difference is extremely large.

Cash Rebate Clawbacks

Many banks offer legal fee subsidies or cash rebates when you first take the loan or when you refinance to them (for example, some banks advertise legal subsidies for minimum S$450,000 loan amounts).[4][5][6] These often come with a clawback period, commonly 3 years from loan inception.

If you refinance away from the bank before the clawback period ends, you may have to return some or all of the subsidy. According to DBS, it may be a good time to consider refinancing when both the lock-in and cash rebate clawback periods have ended.[5]

Ideal Refinance Window Around Lock-in End

Because refinancing to another bank typically takes 8–13 weeks,[1][2] you should start the process before your lock-in ends. Based on common market practice and real timelines, a safe planning framework is:

6 months before lock-in end: Start checking your loan letter and using Homejourney’s calculators at Mortgage Rates .
4–5 months before: Compare packages from DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB and others via Bank Rates .
3 months before: Submit your refinancing application so legal work can complete just as your lock-in ends.[3]

Residents in older condos around Bukit Timah and East Coast often share that starting 4–6 months earlier gave them more room to negotiate and wait for promotions (e.g. cash rebates or reduced spreads) without risking a penalty.

Chapter 4: Interest Rates, SORA & Market Timing

Fixed vs Floating vs SORA-Pegged Loans

Most Singapore bank loans today are either:

Fixed-rate packages (rate locked for 1–3 years).
SORA-pegged floating packages (e.g. 3M or 6M SORA + a spread).
Board-rate or internal floating packages, less common for new packages but common for older loans.

SORA (Singapore Overnight Rate Average) is the main interest rate benchmark used by banks for floating-rate mortgages, published by MAS.