Answer
When to Refinance Your Home Loan in Singapore (2026)
SORA's dropping, bank rates are competitive, and your lock-in might be ending soon. Here's exactly when and how to refinance — and whether it's worth it.
Answer: Start shopping 3 months before your lock-in ends. Early exit penalty is typically 1.5% of outstanding loan (~$11,250 on a $750,000 loan). Only refinance if your interest savings exceed the penalty + legal fees. With SORA-based rates at 1.4–1.8% in early 2026, many borrowers can save $200–$500/month by switching. Always compare free conversion (same bank) vs refinancing (new bank) first.
Refinancing Timeline Checklist
6 months before lock-in ends
Check your letter of offer for the exact lock-in expiry date and penalty terms. Note whether your bank offers free conversion after lock-in.
3 months before lock-in ends
Start collecting refinancing quotes from 3–4 banks. Ask your current bank for their free conversion options. Compare rates, lock-in terms, and subsidies side by side.
2 months before lock-in ends
Submit your refinancing application to the chosen bank. They'll arrange valuation ($300–$500) and process your TDSR check. Appoint a law firm for the conveyancing.
Lock-in expiry date
Refinancing completes around this date. If you miss this window and do nothing, you'll roll onto the bank's board rate — typically 1–1.5% higher than promotional rates.
Early Exit Penalty Math
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%) | Monthly Savings Needed to Break Even in 1 Year |
|---|---|---|
| $500,000 | $7,500 | $625/mo |
| $750,000 | $11,250 | $938/mo |
| $1,000,000 | $15,000 | $1,250/mo |
| $1,500,000 | $22,500 | $1,875/mo |
Breaking the lock-in is rarely worth it. Most borrowers should wait until lock-in expires, then refinance or reprice.
Free Conversion vs Refinancing
| Free Conversion (Repricing) | Refinancing | |
|---|---|---|
| What it is | Switch rate within same bank | Move loan to a new 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 |
| Cashback | Rare | 0.2 – 0.4% of loan |
| Best when | Rate gap is small (<0.2%) | Rate gap is large (>0.3%) |
On a $750,000 loan, a 0.3% rate difference saves ~$2,250/year. If legal fees are $2,500, you break even in about 13 months. Anything above 0.3% — refinancing wins.
Current Rate Landscape (Early 2026)
With 3M SORA at ~0.8–1.0%, floating packages are highly competitive. Here's the general range:
| Rate Type | Range | Notes |
|---|---|---|
| SORA Floating | 1.4% – 1.8% | 3M SORA + 0.5–0.8% spread |
| Fixed (2-year) | 2.0% – 2.5% | Rate locked for 2 years |
| Fixed (3-year) | 2.2% – 2.7% | Longer certainty, slightly higher |
| HDB Loan | 2.6% | Fixed, pegged to CPF OA + 0.1% |
Rates vary by bank and package. Always get actual quotes. Data as of early 2026.
How Much Can You Save?
Monthly payment comparison on a $750,000 loan, 25-year tenure:
| Interest Rate | Monthly Payment | vs 3.5% Rate |
|---|---|---|
| 3.5% (old rate) | $3,753 | — |
| 2.5% (fixed) | $3,364 | Save $389/mo |
| 1.8% (SORA) | $3,093 | Save $660/mo |
| 1.5% (SORA) | $2,999 | Save $754/mo |
Approximate figures. Use the mortgage calculator for exact numbers at your loan amount.
Thinking about refinancing?
Run the numbers on your new monthly payment at different interest rates.
FAQ
When should I start the refinancing process?
Start 3 months before your lock-in period ends. The full refinancing process — application, valuation, legal paperwork — takes about 2-3 months. If you wait until the lock-in expires, you may end up on the bank's board rate (higher) while the new loan is being processed.
What is the penalty for refinancing during lock-in?
Typically 1.5% of your outstanding loan amount. On a $750K loan, that's about $11,250. Some banks charge 0.75%. The penalty applies if you refinance, fully repay, or sell during the lock-in period. Always check your letter of offer for the exact terms.
What is a free conversion (repricing)?
A free conversion means switching to a different rate package within the same bank — no legal fees, no valuation, no penalty (after lock-in). It's faster (1-2 weeks) and cheaper than refinancing. The trade-off: your current bank may not offer the most competitive rate.
Should I pick a fixed or floating rate when refinancing?
With SORA trending down in 2026, floating rates (SORA + spread) are attractive at 1.4-1.8%. Fixed rates give certainty (typically 2.0-2.5% for 2-year packages). If you think rates will stay low or drop further, floating wins. If you want predictable payments, go fixed.
Can I refinance an HDB loan to a bank loan?
Yes. HDB loans have no lock-in period, so you can refinance to a bank loan at any time without penalty. However, once you switch from HDB to bank, you cannot switch back. With bank rates at 1.4-1.8%, this could save you ~$200-$400/month on a $500K loan vs the 2.6% HDB rate.
What are the costs involved in refinancing?
Legal fees: $2,000-$3,000 (some banks subsidise this). Valuation fee: $300-$500. Fire insurance: ~$100-$200. Some banks offer cashback of 0.2-0.4% of loan amount to offset these costs. Total out-of-pocket is typically $0-$3,000 depending on subsidies.
Related
- Mortgage Lock-In Period Singapore — penalties and what triggers them
- Property Loan Interest Rates 2026 — current rates by bank
- Mortgage Calculator — monthly payment at different rates
- How to Pass TDSR
Last updated Feb 2026. Rates change frequently — always get actual quotes from banks. This is informational, not financial advice.