Refinancing means moving your home loan from your current bank to a new bank to get a lower interest rate or better terms. For many Singapore homeowners it is the single fastest way to cut monthly repayments, often by hundreds of dollars a month.
Refinancing vs repricing
These two are easy to confuse.
- Refinancing moves your loan to a different bank. It usually gets you the best rate, but involves a new application and legal work.
- Repricing switches you to a new package within your existing bank. It is faster and cheaper to process, but the rate on offer is often slightly higher than the best in the market.
The right choice depends on the numbers. We compare both for you so you can see which saves more after all costs.
When should you refinance?
The best time to act is when one or more of these is true:
- Your lock-in period is ending. Most packages lock you in for 2 to 3 years. Start reviewing about 4 to 6 months before it expires so the new loan is ready the moment the lock-in ends.
- Your rate has jumped. Many packages offer a low teaser rate that rises sharply after year 2 or 3. If yours has stepped up, the market may now be cheaper.
- Rates in the market have fallen below what you are paying now.
Can you refinance during the lock-in period?
You can, but it rarely makes sense. Leaving during a lock-in usually triggers a penalty of around 1.5 percent of the outstanding loan. If you received legal or valuation subsidies from your current bank, those may also be clawed back if you leave within the claw-back period, normally 3 years. Wait for the lock-in to end unless the savings clearly beat the penalty.
What does refinancing cost?
| Cost | Typical amount |
|---|---|
| Legal fees (conveyancing) | About 1,800 to 3,000 dollars |
| Valuation fee | About 300 to 500 dollars |
| Existing-bank penalty (only if still in lock-in) | Around 1.5 percent of the outstanding loan |
Many banks offer a legal fee subsidy when you refinance with them, which can cover most or all of the legal cost. The key question is simple: do your monthly savings over the next few years exceed these one-time costs? If yes, refinancing pays for itself.
How long does it take?
Plan for about 3 months from start to completion. The application and approval take a couple of weeks, but the legal redemption process with the two banks is what sets the timeline. This is why you should begin 4 to 6 months before your lock-in ends.
Step by step
- Check your current rate, outstanding balance and lock-in end date.
- Compare current packages across banks (we do this for free).
- Apply for the package that saves the most after costs.
- Appoint a law firm to handle the redemption and new mortgage.
- Complete on or just after your lock-in expiry, and start saving.
Common mistakes to avoid
- Chasing the lowest headline rate while ignoring lock-in and clawback clauses.
- Starting too late and getting stuck on a high rate for extra months.
- Refinancing during a lock-in without checking whether the penalty wipes out the savings.
Use the mortgage calculator to see your new monthly repayment, or message us for a free comparison on your exact numbers.