When to Refinance Home Loan in Singapore: Homejourney Guide
This definitive Homejourney guide reveals when to refinance your home loan in Singapore, helping HDB and private property owners save thousands through smart timing. With current SORA rates, lock-in period strategies, and break-even calculations, you'll know the best time to refinance while prioritizing safety and trust.
Homejourney verifies all data and offers tools like multi-bank rate comparisons at https://www.homejourney.sg/bank-rates to ensure confident decisions in a trusted environment[1][2].
Table of Contents
- Executive Summary
- 1. Refinancing Fundamentals
- 2. Financial Analysis: Is It Worth It?
- 3. Key Timing Considerations
- 4. Step-by-Step Refinancing Guide
- 5. Money-Saving Strategies
- 6. How Homejourney Simplifies Refinancing
- FAQ
Executive Summary
The right time to refinance your home loan in Singapore often aligns with the end of your lock-in period, falling SORA rates, or when potential savings exceed costs by at least S$20,000 over the remaining tenure[1][2]. For example, if your current rate is 4% and new offers drop to 3.2%, refinancing could save S$500 monthly on a S$800,000 HDB loan.
Homejourney's platform lets you compare rates from DBS, OCBC, UOB, HSBC, and more, submit one application via Singpass, and track real-time SORA—all in a secure, verified process[2][7]. This pillar guide covers everything from break-even math to hidden fees, empowering safe decisions.
1. Refinancing Fundamentals
Refinancing vs Repricing: Key Differences
Refinancing involves switching banks for better rates or terms, while repricing stays with your current lender for a lower rate. Refinancing offers more options but incurs higher fees (S$2,000-S$5,000); repricing costs under S$500[1][3].
See our detailed comparison: Refinancing vs Repricing: Which is Better for You?[3].
| Aspect | Refinancing | Repricing |
|---|---|---|
| Bank Switch | Yes | No |
| Costs | Legal, valuation (S$3,000+) | Admin (S$200-S$500) |
| Best For | Rate drops >0.5% | Small rate cuts |
HDB vs Private Property Refinancing
HDB loans can't be refinanced with HDB again once switched to banks, per HDB rules. Private properties refinance only via banks. Both face MAS TDSR (60% debt cap) and LTV limits (75% for first-timer HDB)[2][9].
2. Financial Analysis: Is It Worth It?
Break-Even Calculation
Calculate break-even as total refinancing costs divided by monthly savings. Example: S$4,000 costs / S$300 savings = 13 months. Refinance if remaining tenure > break-even + 2 years[1].
Use Homejourney's calculator at https://www.homejourney.sg/bank-rates#calculator. Read more: How to Calculate If Refinancing Is Worth It[1].
Hidden Costs Breakdown
Expect legal fees (S$2,000-S$3,000, often subsidized), valuation (S$500-S$1,500), admin (S$200), and clawback (1.5% if early). Total: S$3,000-S$6,000[1][2].
- Legal Subsidy: Banks like UOB offer up to S$2,500[4].
- Clawback: 1-1.5% if within rebate period[1].
- Valuation: Required for properties >S$1M.
| Cost Type | Estimate (S$) | Often Subsidized? |
|---|---|---|
| Legal Fees | 2,000-3,000 | Yes (80-100%) |
| Valuation | 500-1,500 | Partial |
| Prepayment Penalty | 1.5% of loan | No |
Details in: Hidden Costs in Refinancing Mortgage[1].
Real Savings Examples
S$1M loan, 20 years left, 4% to 3.5%: Saves S$28,000 total, S$117/month. HDB S$500K at 2.6% HDB to 3M SORA 3%: Saves S$15,000[2]. Always verify with Homejourney bank rates.
3. Key Timing Considerations
Lock-In Period End: The Primary Trigger
Most loans have 2-3 year lock-ins with 1.5% penalties. Refinance timing peaks 4-6 months before end to allow processing[1][2][7]. DBS advises post-lock-in and clawback[7].
Interest Rate Triggers
Refinance when new rates are 0.5%+ lower. Monitor SORA: 3M SORA at ~3.0% (Jan 2026). Interest rate trigger: Act if drop >0.5% and break-even <24 months[1].
SORA is Singapore Overnight Rate Average, the key benchmark since 2020, replacing SOR/FIX[9].
The chart below shows recent interest rate trends in Singapore:
As seen, SORA dipped 0.3% in Q4 2025—ideal for refinancing[1]. Track live on Homejourney.
Market Conditions and Personal Factors
Best in falling rates (post-US Fed cuts). Personal: Income rise, debt drop (TDSR buffer). Avoid if selling soon[3]. Insider tip: Start 120 days pre-lock-in expiry.
4. Step-by-Step Refinancing Guide
Full guide: Step-by-Step Guide to Refinancing[1][2].
- Assess Current Loan: Check balance, rate, lock-in via statement[1].
- Compare Rates: Use Homejourney for DBS (3.0%), OCBC (3.1%), UOB[2].
- Calculate Savings: Homejourney calculator.
- Apply: Singpass on bank-rates—one form, multiple offers[2].
- Documents: IC, income slips, property deed (3 months)[1].
- Legal/Valuation: 4-8 weeks.
- Switch: 3-month notice to old bank.
Timeline: 2-3 months total. Start early[2].
5. Money-Saving Strategies
- Negotiate: Pit banks vs each other—Homejourney multi-app gets competing offers.
- Cash Rebates: UOB S$2,000+ for S$450K+ loans[4]. OCBC up to S$2,800[6].
- Shorten Tenure: Saves interest but raises EMI.
- Combine Goals: Cash-out for reno if LTV allows (MAS rules)[9].
Rates comparison: Best Bank Refinancing Rates 2026[4].
6. How Homejourney Simplifies Refinancing
Homejourney prioritizes your safety with verified rates, Singpass integration, and one-click multi-bank apps. Compare DBS, OCBC, UOB, HSBC, Standard Chartered, Maybank, CIMB, RHB, Public Bank, Hong Leong, Citibank instantly.
- Live SORA tracker for perfect refinance timing.
- Eligibility calculator: https://www.homejourney.sg/bank-rates#calculator.
- Connect with our mortgage brokers for free guidance.
- Search budget-fit properties: https://www.homejourney.sg/search.
Trusted, transparent—your secure path to savings. Disclaimer: Not financial advice; consult professionals. Rates as of Jan 2026[1][2].
FAQ: When to Refinance Home Loan in Singapore
When is the best time to refinance my home loan?
Post-lock-in (2-3 years), when rates drop 0.5%+, and savings > costs. Use Homejourney tools[1][7].
What is a lock-in period end trigger?
Avoid 1.5% penalties by refinancing after 2-3 years[1].
How much can I save refinancing now?
S$20K+ on S$1M loan if 0.5% drop. Calculate on Homejourney[2].
Can I refinance HDB loan?
Yes, to banks, but no return to HDB[2].
What documents for refinancing?
IC, payslips, loan statements, deed[1].
Is refinancing worth the fees?
Yes if break-even <24 months. See guide: Hidden Costs[1].
Next steps: Visit https://www.homejourney.sg/bank-rates to compare, calculate, and apply securely with Homejourney—your trusted partner for safe property decisions.
References
- Singapore Property Market Analysis 1 (2026)
- Singapore Property Market Analysis 2 (2026)
- Singapore Property Market Analysis 7 (2026)
- Singapore Property Market Analysis 3 (2026)
- Singapore Property Market Analysis 9 (2026)
- Singapore Property Market Analysis 4 (2026)
- Singapore Property Market Analysis 6 (2026)
