Answer
Mortgage Lock-In Period — What Happens If You Break It?
That 2–3 year lock-in on your mortgage isn't just fine print. Breaking it costs real money. Here's exactly what you need to know.
Answer: Most bank home loans in Singapore have a 2–3 year lock-in period. Breaking it early costs a penalty of 1.5% of your outstanding loan. On a $750,000 loan, that's about $11,250. After the lock-in ends, you can refinance or do a free conversion (repricing) with no penalty. HDB loans have no lock-in.
What Lock-In Means
You can't leave without paying
During the lock-in period, if you refinance to another bank, fully repay the loan, or sell the property, the bank charges a penalty — typically 1.5% of the outstanding loan amount. Some banks charge 0.75–1.5% depending on the package.
Why banks do it
Banks spend money to acquire you as a customer (legal subsidies, cashback offers, processing). The lock-in ensures they earn enough interest to recoup that cost. In return, they give you a lower rate during the lock-in.
What triggers the penalty
Full loan repayment, refinancing to another bank, or selling the property. Partial prepayments are usually allowed (many banks allow partial repayments without penalty, even during lock-in — check your terms).
Typical Lock-In Periods by Bank
Lock-in varies by package, not just by bank. But here's the general pattern:
| Bank | Typical Lock-In | Penalty | Notes |
|---|---|---|---|
| DBS | 2 years | 1.5% | Free conversion after lock-in |
| OCBC | 2–3 years | 1.5% | Some packages have 3-year lock-in |
| UOB | 2 years | 1.5% | Free conversion after lock-in |
| Standard Chartered | 2 years | 0.75–1.5% | Penalty varies by package |
| HSBC | 2–3 years | 1.5% | Competitive fixed rates |
| Maybank | 2 years | 1.5% | — |
| CIMB | 2–3 years | 1.5% | — |
| HDB Loan | None | $0 | Can refinance to bank anytime |
Rates and lock-in vary by loan package. Always check the letter of offer. Data as of early 2026.
Cost of Breaking the Lock-In
The penalty is calculated on your outstanding loan balance, not the original loan amount. Here's what 1.5% looks like:
| Outstanding Loan | Penalty (1.5%) | Penalty (0.75%) |
|---|---|---|
| $500,000 | $7,500 | $3,750 |
| $750,000 | $11,250 | $5,625 |
| $1,000,000 | $15,000 | $7,500 |
| $1,500,000 | $22,500 | $11,250 |
| $2,000,000 | $30,000 | $15,000 |
When to Refinance
Set a calendar reminder
Mark the date your lock-in ends. Start shopping for rates 2–3 months before — the refinancing process takes about 3 months from application to completion.
Compare: free conversion vs refinancing
Your current bank will offer you a free conversion (new rate package, same bank, no legal fees). Compare this against refinancing offers from other banks. If the difference is small (<0.2%), free conversion usually wins because you save on legal fees.
The math on refinancing
Refinancing costs about $2,000–$3,000 in legal fees (some banks subsidise this). On a $750,000 loan, a 0.3% rate difference saves ~$2,250/year. So you break even in about 1 year.
Free Conversion vs Refinancing
| Free Conversion (Repricing) | Refinancing | |
|---|---|---|
| What it is | Switch rate package within same bank | Move entire loan to different bank |
| Legal fees | $0 | $2,000 – $3,000 |
| Valuation needed | No | Yes ($300 – $500) |
| Processing time | 1 – 2 weeks | 2 – 3 months |
| New lock-in | Usually yes (2 years) | Yes (2 – 3 years) |
| Cashback offer | Rare | Sometimes (0.2 – 0.4% of loan) |
| Best when | Rate difference is small (<0.2%) | Rate difference is large (>0.3%) |
Lock-in ending soon?
Run the numbers on your new monthly payment at different interest rates.
FAQ
What is a mortgage lock-in period?
A lock-in period is a contractual window (usually 2-3 years) during which you cannot refinance, repay in full, or switch to another bank without paying a penalty. The penalty is typically 1.5% of the outstanding loan amount. It starts from the date of loan disbursement.
Can I sell my property during the lock-in period?
Yes, you can sell, but you will trigger the lock-in penalty (1.5% of outstanding loan) since selling means fully repaying the mortgage. Some banks waive the penalty for sale of property — check your letter of offer. Most do not waive it.
What is the difference between free conversion and refinancing?
Free conversion (also called repricing) means switching to a different rate package within the same bank — no legal fees, no penalty after lock-in. Refinancing means moving your entire loan to a different bank — involves legal fees ($2K-$3K) and valuation, but you may get a better rate.
Should I refinance or do a free conversion?
Compare the rates. If your current bank offers a competitive package via free conversion, take it — zero legal fees. If another bank offers a significantly lower rate (0.3%+ difference), refinancing may be worth the $2K-$3K legal cost. On a $750K loan, a 0.3% rate difference saves about $2,250/year.
Do HDB loans have a lock-in period?
No. HDB loans (at 2.6% fixed) have no lock-in period. You can refinance to a bank loan at any time without penalty. However, once you switch from HDB to a bank loan, you cannot switch back to an HDB loan.
Related
- Mortgage Calculator — monthly payment at different rates
- Property Loan Interest Rates 2026 — current rates by bank
- Property Loan Rejection Reasons
- How to Pass TDSR
Last updated Feb 2026. Lock-in terms vary by bank and loan package — always check your letter of offer. This is informational, not financial advice.