Answer
Mortgage Refinancing Guide — Singapore (2026)
Your lock-in is ending, SORA's dropped, and your banker hasn't called. Here's when refinancing saves you real money — and when it's not worth the hassle.
Answer: Refinance when your lock-in period expires and a new bank offers a rate at least 0.3% lower than your current one. Costs are typically $2,000–$4,000 (legal + valuation). On a $750,000 loan, a 0.5% rate drop saves ~$3,750/year — you break even in under 12 months. Start shopping 3 months before lock-in ends. If the rate gap is small (<0.2%), reprice with your current bank instead.
When to Refinance
There are two triggers:
1. Lock-in period is ending
Most home loans have a 2–3 year lock-in. Once it expires, you can refinance without penalty. If you do nothing, you roll onto the bank's board rate — typically 1–1.5% higher than promotional rates. This is where most people bleed money.
2. Rates have dropped significantly
If market rates have fallen 0.5%+ since you locked in, refinancing can save thousands per year. In early 2026, SORA-based floating rates are at 1.4–1.8% — well below the 3–4% rates locked in during 2023–2024.
Fixed vs Floating — Which to Pick
| Factor | Fixed Rate | Floating (SORA) |
|---|---|---|
| Rate range (early 2026) | 2.0% – 2.5% | 1.4% – 1.8% |
| How it works | Rate locked for 2–3 years | 3M SORA + bank spread (0.5–0.8%) |
| Rate changes | No — locked | Yes — adjusts every 3 months |
| Best when | Rates at bottom, expect increase | Rates high, expect decrease |
| Risk | Paying above market if rates fall further | Payments increase if SORA rises |
| Monthly on $750,000 loan, 25yr | $3,178 – $3,364 | $2,912 – $3,093 |
Board rate (variable) is different from SORA. Board rate is set by each bank unilaterally. SORA is a market benchmark. Always clarify which one your package is pegged to.
Refinancing Costs
| Cost Item | Amount | Notes |
|---|---|---|
| Legal fees (conveyancing) | $2,000 – $3,000 | Some banks subsidise partially or fully |
| Valuation fee | $300 – $500 | Required for new bank to assess LTV |
| Fire insurance | $100 – $200 | New policy with new bank |
| Early repayment penalty | 0% – 1.5% | Only if still in lock-in period |
| Total (after lock-in) | $2,400 – $3,700 | Excluding penalty |
Many banks offer cashback (0.2–0.4% of loan amount) or legal subsidies to win your business. On a $750,000 loan, 0.3% cashback = $2,250 — enough to cover most of the costs.
Break-Even Math
The key question: how many months until your interest savings exceed the refinancing costs? On a $750,000 loan:
| Rate Drop | Annual Savings | Monthly Savings | Break-Even ($3,000 cost) |
|---|---|---|---|
| 0.2% | $1,500 | $125 | 24 months |
| 0.3% | $2,250 | $188 | 16 months |
| 0.5% | $3,750 | $313 | 10 months |
| 0.8% | $6,000 | $500 | 6 months |
| 1.0% | $7,500 | $625 | 5 months |
Approximate. Actual savings depend on remaining tenure and amortisation. At 0.3%+ rate difference, refinancing almost always makes sense if you stay past the new lock-in.
Step-by-Step Refinancing Process
3 months before lock-in ends
Collect quotes from 3–4 banks. Ask for: rate, lock-in period, legal subsidy, cashback, clawback terms. Also ask your current bank for a repricing (free conversion) quote.
2 months before lock-in ends
Compare all offers. Calculate break-even for each. Submit your refinancing application to the chosen bank. They will run a TDSR check and arrange a property valuation.
6–8 weeks before lock-in ends
Receive Letter of Offer from the new bank. Appoint a conveyancing lawyer (the new bank usually has a panel). Sign the mortgage documents.
Lock-in expiry date
The new bank pays off your old loan and takes over. Your new rate kicks in. You start paying the new bank from the next billing cycle.
After completion
Update your GIRO for mortgage payments. Set a reminder for the new lock-in expiry — you will want to review again in 2–3 years.
Decision Framework: Reprice or Refinance?
| Situation | Recommendation |
|---|---|
| Rate gap < 0.2% | Reprice with current bank (free conversion) |
| Rate gap 0.2–0.3% | Reprice if available, refinance if bank offers cashback that covers costs |
| Rate gap > 0.3% | Refinance — savings exceed costs within 1–2 years |
| Still in lock-in | Wait. Penalty (1.5%) almost never makes break-even work |
| Selling within 2 years | Check clawback terms. May not be worth a new lock-in |
Run the numbers on your refinance
See your new monthly payment at different interest rates and compare against what you are paying now.
FAQ
What is the difference between refinancing and repricing?
Refinancing means moving your loan to a different bank. Repricing (free conversion) means switching to a different rate package within the same bank. Repricing is cheaper ($0 legal fees, 1–2 weeks) but your current bank may not offer the best rate. Refinancing costs $2K–$4K but opens up rates from all banks.
What is a clawback period for refinancing subsidies?
Many banks offer legal fee subsidies or cashback when you refinance to them. If you refinance away again within the clawback period (usually 2–3 years), you must repay these subsidies. For example, if the bank gave you $2,000 in legal fee subsidies and you refinance within 2 years, you owe that $2,000 back.
Should I refinance from HDB loan to bank loan?
HDB loans have no lock-in period, so there is no penalty. With HDB rate at 2.6% and bank floating rates at 1.4–1.8% (early 2026), you save $200–$400/month on a $400K loan. But once you switch to a bank, you cannot switch back to HDB. If rates spike above 2.6%, you are stuck with the bank rate.
What documents do I need for refinancing?
Latest 3 months payslips, latest NOA (Notice of Assessment from IRAS), last 12 months CPF contribution history, current loan statements, property title deed, and identification. Self-employed borrowers need 2 years of NOAs and business financial statements.
How do I know if my lock-in period has ended?
Check your Letter of Offer from the bank. It states the lock-in period (e.g., "2-year lock-in from date of first disbursement"). You can also call your bank’s mortgage hotline and ask for the exact lock-in expiry date. Mark it in your calendar 3 months before it ends.
Is it worth refinancing for a 0.2% rate difference?
Usually not. On a $500K loan, 0.2% saves about $1,000/year. After $2,500–$3,500 in legal and valuation fees, you need 2.5–3.5 years to break even. A 0.3% or larger gap is where refinancing makes sense, assuming you stay in the property for at least 2–3 more years.
Related
Last updated Feb 2026. Interest rates change frequently — always get actual quotes from banks. SORA data from MAS. This is informational, not financial advice.