When to Consider Refinancing
Three months before your lock-in ends is the single best moment to start comparing packages — wait for your bank's letter to arrive and you have already lost the leverage of a competing offer from elsewhere. Every private home loan in Singapore carries a lock-in window, and the day it lapses your rate rolls onto a floating reference (a board rate or a SORA-pegged spread) that the bank sets, not you.
Three triggers make refinancing worth the paperwork:
- Lock-in has just ended, or ends within 3 months. This is also when you must serve notice — see the step-by-step process below.
- The gap between your current floating rate and a new package's rate clears your switching costs inside 18-24 months of holding. Run the numbers with the refinancing switch cost calculator before approaching any bank.
- Your outstanding loan quantum is still large enough for the savings to matter. A 0.3 percentage-point cut on a S$200,000 balance saves far less in absolute dollars than the same cut on a S$1,000,000 balance, even though the percentage move is identical.
Property valuation also decides what a new bank will lend against. Track the URA private residential price index for your segment before you commit to a valuation-dependent refinance — a bank valuation that comes in below your outstanding loan quantum can force you to top up cash just to complete the switch.
Refinancing vs Repricing
Repricing keeps you with the same bank — you're asking them to move you onto one of their current packages before your loan reverts to the standard board rate. Refinancing means redeeming the loan entirely and taking a fresh facility with a different bank. The two paths diverge sharply on effort, cost, and how hard the bank scrutinises your finances on this second pass.
| Factor | Repricing (same bank) | Refinancing (new bank) |
|---|---|---|
| New credit assessment | Often waived, or a light-touch check since the bank already holds your file | Full fresh assessment — TDSR re-run at 55% of gross income (as of 2026-07) against every debt you currently carry |
| Legal work | None — no discharge or new mortgage to register | Conveyancing lawyer required to discharge the old mortgage and register the new one |
| Valuation | Not required in most cases | Required — the new bank lends against its own valuation, not your original purchase price |
| Clawback risk | None — you never trigger the exit clause | Full exposure if you're still inside the legal/cash subsidy clawback period on the current loan |
| Total cost | Lower — no legal fees, no valuation, no clawback | Higher upfront, offset only if the rate gap and any bank-paid subsidy cover it |
If your existing bank's reprice offer lands within a few basis points of the best refinance quote you can find, repricing wins on total cost once you factor in legal fees and the effort of a mid-loan bank switch. For a fuller comparison of fixed, board-rate, and SORA-pegged structures once you're past the lock-in, see the condo mortgage guide.
Lock-In Period & Clawback Fees
Lock-in periods run in fixed blocks — 1-year, 2-year, 3-year, and 5-year structures are the blocks Singapore banks structure their packages into, and the length is fixed the day you sign the Letter of Offer. Exit before that date and you forfeit the incentives baked into your rate, not the rate itself.
Two separate costs bite if you break out early:
- Prepayment penalty. A percentage of the loan quantum you redeem, charged by the bank you're leaving. The exact figure sits in your Letter of Offer, not in any published rate card, so pull that document before you calculate a break-even.
- Legal and valuation subsidy clawback. If your current bank paid your legal fees or valuation costs when you took the loan, redeeming inside the clawback window — commonly the same length as the lock-in — means paying that subsidy back in full.
Redeeming a loan inside its lock-in AND inside its subsidy clawback window stacks two separate costs on top of each other. Read the redemption clause of your Letter of Offer line by line before you sign anything with a new bank — a saving that looks attractive on the headline rate can evaporate once both penalties land on the same statement.
Your CPF position doesn't change when you refinance a loan you're still holding — the CPF Board's accrued interest rules only trigger accrued-interest repayment on a full sale, not a refinance. What you owe CPF — principal plus 2.5% p.a., as of 2026-07 — keeps accruing against the same property regardless of which bank holds the mortgage.
Step-by-Step Refinancing Process
Refinancing follows a fixed sequence, and the biggest scheduling risk is the notice period — miss it and you pay interest for the shortfall.
- Check your Letter of Offer (Week 0). Confirm your lock-in end date and any subsidy clawback window before approaching a new bank.
- Shop and compare Indicative Letters of Offer (Weeks 0-2). Collect quotes from 2-3 banks and run each through the mortgage repayment calculator to compare monthly instalments on equal terms.
- Serve 3 months' written notice to your current bank (Week 2-3). Most Singapore home loans require this exact notice period for a full redemption — skip it and the bank charges interest in lieu for the shortfall.
- Submit your TDSR documents to the new bank (Weeks 3-6). The new bank re-runs your Total Debt Servicing Ratio at 55% of gross monthly income (as of 2026-07), the ceiling set under MAS's Total Debt Servicing Ratio framework, against every loan and card balance you currently service — check your own ratio with the TDSR ratio calculator first so a weak number doesn't surprise you mid-application. The TDSR and MSR explainer guide covers how the two ratios interact if you're also holding an HDB loan.
- Accept the formal Letter of Offer and instruct a conveyancing lawyer (Week 6-8). The lawyer handles the discharge of your existing mortgage and the registration of the new one simultaneously.
- Completion — old loan redeemed, new loan disbursed (Week 8-10). Confirm the disbursement date lines up with your redemption date; a gap between the two means either a bridging cost or a scramble for interim cash.
Documentation Requirements
A refinance application is underwritten exactly like a fresh mortgage — the new bank has no history with you, so it asks for everything.
| Category | What to prepare |
|---|---|
| Income | Latest 12 months' payslips (employed) or 2 years' Notice of Assessment (self-employed or variable income) |
| Existing loan | Latest mortgage statement showing the outstanding balance, plus your current Letter of Offer |
| Debt obligations | Statements for car loans, other mortgages, and credit card balances — all feed into the TDSR calculation |
| CPF | CPF withdrawal statement for the property, so the new bank can see how much of the price was CPF-funded |
| Property | Latest property tax bill and, where required, a fresh bank valuation |
| Identity | NRIC/passport, and for PRs, your re-entry permit |
Redeeming and re-registering a mortgage also carries a fixed legal cost separate from the mortgage rate itself — budget S$2,500–S$3,500 (as of 2026-07) for the conveyancing work alone, before any bank subsidy offsets it. The mortgage instrument itself attracts a separate, much smaller stamp fee — confirm the exact figure on IRAS's stamp duty pages before signing anything.
Ask your existing bank for a redemption statement as soon as you start the process — some banks take one to two weeks to issue it, and the new bank cannot finalise your Letter of Offer without the exact payout figure it shows.
Cost-Benefit Analysis
Run an illustrative case (as of 2026-07): you're carrying a S$800,000 outstanding balance with 18 years left on the loan, and the best quote you've collected undercuts your current effective rate by 0.5 percentage points. That single number — the rate gap, not the headline rate on either package — is what decides whether switching is worth it.
Monthly saving = outstanding balance × rate gap ÷ 12
On this balance, a 0.5 percentage-point gap works out to a simplified interest-only estimate of S$333 a month before fees. Weigh that against everything it costs to switch:
| Item | Amount |
|---|---|
| Conveyancing legal fees | S$3,000 |
| Valuation fee | S$500 |
| Subsidy clawback (if inside window) | S$2,000 |
| Total switching cost | S$5,500 |
| Interest-only monthly saving | S$333 |
| Break-even period | 16.5 months |
If you plan to hold the property and this loan longer than the break-even period — 16.5 months in this illustrative case — the switch clears a net gain from month 17 onward. Shorter than that, and the switching cost outweighs what you save. Plug your own balance and quoted rates into the same arithmetic before committing; this example uses round numbers purely for clarity. A shorter break-even also compounds in your favour if you switch again later — a smaller total switching cost next time lowers the bar all over again.
Best Refinancing Packages 2026
Naming a "best" package here would be stale before you finish reading — banks reprice against the SORA curve month to month, and any rate this guide quoted today would be a historical artefact by the time you refinance. What stays constant is the checklist for judging any package on offer, whichever bank issues it.
- Rate structure. Fixed-rate lock-ins protect against a rising SORA curve; SORA-pegged floating packages track the market directly and reprice down faster if rates fall; board-rate floating hands the bank discretion over your revised rate, which cuts the other way.
- Lock-in length matched to your holding plan. A shorter lock-in costs more today but frees you to refinance again sooner if rates move in your favour.
- Legal and valuation subsidy. Some packages absorb your switching costs entirely — check whether that subsidy carries its own clawback period before you count it as free money.
- Conversion or repricing option. A package that lets you reprice internally once the lock-in ends, without a fresh TDSR assessment, holds real value if your income situation has grown more complicated since you first bought.
Track how the reference rate itself is moving before you lock in a new package — the SORA rate tracker updates as the benchmark curve shifts. A mortgage broker can also pull live quotes across banks faster than approaching each one individually, which matters most when you're comparing three or four Indicative Letters of Offer against a fixed notice-period clock.
Common Refinancing Mistakes
Most refinancing regret traces back to timing, not the rate itself.
- Skipping the Letter of Offer's redemption clause. The prepayment penalty and clawback terms live there, not in any bank's marketing material — read it before you sign an Indicative Letter of Offer with a competitor.
- Leaving the 3-month notice too late. Start the notice clock the day you decide to switch, not the day the new bank approves you — a compressed timeline is how borrowers end up paying interest in lieu of notice.
- Ignoring a falling valuation. If your unit's value has dropped since purchase, the new bank lends against the lower figure, which can shrink your approved loan quantum below what you need to fully redeem the old one.
- Comparing headline rates instead of total cost. A lower rate with a longer lock-in and no subsidy can cost more over the period than a slightly higher rate that includes free legal and valuation.
- Re-running TDSR too late. New debts taken on since your last assessment — a car loan, a second mortgage, a higher credit card limit — all count against the 55% ceiling (as of 2026-07) on this second pass, and can shrink your borrowing capacity even though your income hasn't changed.
Every one of these is checkable before you approach a new bank — the redemption clause, the notice date, and your current TDSR position are all sitting in documents you already hold.
Frequently Asked Questions
How soon after purchase can I refinance?
There is no minimum ownership period set by law — you can refinance any time after completion, but your existing loan's lock-in period is what actually constrains you in practice. Most home loans carry a 2–3 year lock-in, and switching banks before it ends triggers an early redemption penalty on the outstanding amount. Check your original loan's lock-in clause first; once it expires, you are free to refinance without penalty, subject to meeting TDSR at 55% (as of 2026-07) again.
What fees are involved in refinancing?
Refinancing typically involves legal fees, a property valuation fee, and — if you switch before your existing loan's lock-in period ends — an early redemption penalty on the outstanding balance. Many banks offset this with a cash rebate or fee subsidy to win your business, so compare the net cost after subsidies, not just the headline rate. You will also need to re-pass TDSR at 55% (as of 2026-07) with the new bank, since refinancing is treated as a fresh loan application.
Is repricing better than refinancing?
Repricing — switching to a new rate package with your current bank — is usually faster and cheaper than refinancing, since it skips legal conveyancing, a valuation fee, and a fresh TDSR reassessment. Refinancing to a different bank involves more paperwork and cost but often unlocks more competitive new-customer rates and cash rebates. Repricing wins when your current bank's new package is close to market rate; refinancing wins when the savings from a lower rate elsewhere outweigh the switching costs.