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Property Loan Lock-In Period — Penalty, Strategy & When to Refinance
The lock-in period is one of the most important (and most overlooked) terms in your mortgage. Here's what it means for your money and your exit strategy.
Answer: Most bank home loans in Singapore have a 2–3 year lock-in period. If you refinance, sell, or fully repay during lock-in, the penalty is 1.5% of your outstanding loan — that's $11,250 on a $750,000 loan. The lock-in starts from first loan disbursement and you should start shopping for refinance rates 2–3 months before expiry. HDB loans have no lock-in at all.
Lock-In Period by Loan Type
| Loan Type | Lock-In | Penalty | Notes |
|---|---|---|---|
| Bank fixed rate | 2–3 years | 1.5% | Lower rate during lock-in, reverts after |
| Bank floating rate (SORA) | 2 years | 1.5% | Rate moves with SORA even during lock-in |
| Bank board rate | 2–3 years | 0.75–1.5% | Bank sets rate at discretion |
| HDB loan | None | $0 | 2.6% fixed, refinance anytime |
Lock-in terms vary by bank and package. Always check the letter of offer before signing.
What the 1.5% Penalty Looks Like
The penalty is on your outstanding balance at the time of early repayment, not the original loan amount:
| Outstanding Loan | Penalty (1.5%) | Penalty (0.75%) |
|---|---|---|
| $400,000 | $6,000 | $3,000 |
| $600,000 | $9,000 | $4,500 |
| $750,000 | $11,250 | $5,625 |
| $1,000,000 | $15,000 | $7,500 |
| $1,500,000 | $22,500 | $11,250 |
When the Lock-In Starts and Ends
| Property Type | Lock-In Starts | Lock-In Ends (2-yr example) |
|---|---|---|
| Completed condo (resale) | Date of full loan disbursement | 2 years from disbursement |
| New launch (progressive) | Date of first drawdown | 2 years from first drawdown |
| HDB resale | Date of loan disbursement | 2 years from disbursement |
| HDB BTO | Key collection (loan starts) | 2 years from key collection |
For new launches, the lock-in may expire before TOP — meaning you could refinance during construction. Verify with your bank.
Strategy: Refinance at Lock-In Expiry
1. Set a calendar reminder
Mark the date your lock-in ends. Start shopping 2–3 months before expiry — the refinancing process takes about 2–3 months from application to completion.
2. Compare free conversion vs refinancing
Your current bank will offer a free conversion (repricing) — new rate, same bank, zero legal fees. Compare this against refinancing offers from other banks. If the rate difference is small (<0.2%), repricing wins because you save on legal fees.
3. Do the math on refinancing costs
Refinancing costs $2,000–$3,000 in legal fees + $300–$500 for valuation. On a $750,000 loan, a 0.3% rate difference saves ~$2,250/year. You break even in about 1 year.
4. Repeat every 2–3 years
This is the cycle: lock in at the best available rate, ride out the lock-in, then shop again at expiry. Most savvy homeowners refinance or reprice every 2–3 years throughout their mortgage.
Free Conversion vs Refinancing
| Free Conversion (Repricing) | Refinancing | |
|---|---|---|
| What it is | Switch rate within same bank | Move loan to a different bank |
| Legal fees | $0 | $2,000–$3,000 |
| Valuation | Not needed | $300–$500 |
| Processing time | 1–2 weeks | 2–3 months |
| New lock-in | Usually 2 years | 2–3 years |
| Best when | Rate gap < 0.2% | Rate gap > 0.3% |
Lock-in ending soon?
See what your new monthly payment looks like at different interest rates.
FAQ
What is a property loan lock-in period?
A lock-in period is a contractual window (typically 2–3 years from loan disbursement) during which you cannot refinance, fully repay, or switch to another bank without paying a penalty. The penalty is usually 1.5% of the outstanding loan balance. It protects the bank’s interest since they subsidise legal fees and offer lower initial rates.
How much is the penalty for breaking the lock-in?
Typically 1.5% of your outstanding loan balance. On a $750,000 loan, that’s $11,250. Some banks charge 0.75% depending on the package. The penalty applies whether you refinance, sell the property, or make a full early repayment during the lock-in.
When does the lock-in period start?
The lock-in starts from the date of first loan disbursement. For completed properties, this is when the loan is fully drawn down. For new launches under progressive payment, it typically starts from the first drawdown (not TOP). Check your letter of offer for the exact start date.
Can I make partial prepayments during lock-in?
Many banks allow partial prepayments without penalty, even during lock-in — but there’s usually a cap (e.g., up to 50% of the original loan). Some packages restrict all prepayments during lock-in. Check the specific terms in your letter of offer.
Do HDB loans have a lock-in period?
No. HDB loans (at 2.6% fixed rate) have zero lock-in. You can refinance to a bank loan at any time without penalty. However, once you switch from an HDB loan to a bank loan, you cannot switch back. This flexibility is one of the key advantages of HDB loans.
When should I start looking to refinance?
Start shopping for rates 2–3 months before your lock-in ends. The refinancing process takes about 2–3 months from application to completion. Also compare your current bank’s free conversion (repricing) offer — if the rate difference is small (<0.2%), repricing saves you legal fees.
Related
- Mortgage Lock-In Period Singapore — penalty details by bank
- Refinance Home Loan Singapore — start 3 months before lock-in ends
- Repricing vs Refinancing — $0 cost vs $2K–$3K
- Property Loan Interest Rates 2026 — current rates by bank
- HDB Loan Early Repayment — no penalty, ever
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.