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Guide to Refinance HDB Loan

Refinancing your HDB loan allows you to switch to a new mortgage with better terms and lower interest rates. This guide walks you through how to refinance HDB loan effectively to achieve long-term savings and financial flexibility.
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Image of HDB blocks in Singapore to illustrate the new wait-out period for resale flats

What It Means to Refinance a HDB Loan

Refinancing a HDB loan means replacing your existing HDB mortgage, usually from HDB, with a new loan from a bank to secure better terms or enjoy lower interest rates. When you refinance home loan, you take up a new mortgage to pay off your current one, with the flexibility to adjust your interest rate, loan tenure, or repayment structure. Many HDB homeowners in Singapore choose to refinance to take advantage of competitive bank rates, lower their monthly repayments, and improve their overall financial stability. Many homeowners in Singapore choose to refinance home loan to enjoy lower monthly repayments, reduce total interest costs, or gain greater financial flexibility.

Benefits of Refinance HDB Loan

refinance home loan

Lower Interest Rates

Refinancing can help you secure a lower interest rate on your home loan, easing the financial burden that many Singaporeans feel over their mortgages. This is especially beneficial if you're currently locked into a higher interest rate or if market rates have fallen since you first took your loan. By doing a refinancing for your home loan, you can enjoy better rates and long term savings. You can also choose to switch from a fixed rate to a floating rate or vice versa to further optimise your interest payments.
refinance home loan

Restructure Loan Terms

Refinancing your home loan can also help if you are finding it difficult to keep up with your monthly payments. When you refinance home loan, you can make changes to your existing loan terms such as extending the tenure, lowering the interest rate, or adjusting the repayment schedule. For example, you could shorten your loan tenure to pay it off sooner and save on total interest, or choose a flexible repayment plan that lets you pay more when you have extra cash. On the other hand, extending your loan tenure can reduce your monthly instalments and ease your financial burden.
refinance home loan

Reduce Monthly Repayments

Lowering your monthly home loan repayments can free up cash for other financial needs. By choosing to refinance home loan, you can switch to a package with a lower interest rate or extend your loan tenure to make instalments more manageable. This helps ease short-term financial pressure while giving you flexibility to plan your budget more comfortably. Over time, you can still explore options to shorten your loan tenure once your finances improve, helping you save more on interest in the long run.
refinance hdb loan

Tailored Home Loan Packages

Refinancing gives you access to a wide range of home loan packages that can be tailored to your needs. Whether you prefer the stability of a fixed rate or the flexibility of a floating rate, banks in Singapore offer options to match your financial goals. With the right refinance home loan package, you can enjoy better control over your repayments and maximise long-term savings.

When to Refinance HDB Loan ✅

Knowing when to refinance home loan can help you save more and manage your finances smarter.
There isn’t one fixed moment that works for everyone, but certain situations can make refinancing more beneficial. Here are some of the most common times when it makes sense to review your home loan and explore new options. Many homeowners in Singapore choose to refinance home loan to enjoy lower monthly repayments, reduce total interest costs, or gain greater financial flexibility.
Savings Outweigh Refinancing Costs
Refinancing your HDB loan makes financial sense when the savings from a lower interest rate are greater than the total costs involved. These costs usually include legal fees and valuation charges. When your potential interest savings over time exceed these fees, it’s a strong indicator that it’s the right time to refinance home loan.
Improve Cash Flow
If your monthly expenses are growing or you simply want more breathing room in your budget, refinancing can help reduce your monthly repayments. By switching to a lower rate or extending your loan tenure, you can make your finances more manageable while still working toward your long-term goals.
When Home Loan Rates Fall
A drop in home loan rates can be a great opportunity to refinance home loan and secure a lower interest rate. By switching to a new package, you can reduce your monthly repayments and save on total interest over your loan tenure. However, rates may fluctuate, so it’s wise to compare different home loan refinance offers and ensure the savings outweigh any refinancing costs.

💡 Example: If you have an outstanding loan of $400,000 at 2.6% interest with 20 years remaining, switching to a bank loan at 1.6% could save you around S$200 each month or approximately S$2,400 per year. Although refinancing involves certain expenses such as legal and valuation fees, these costs are usually covered by the bank’s subsidy or cash rebate, allowing you to enjoy immediate savings from your new home loan.

When not to Refinance HDB Loan ⛔

Refinancing can be a smart move, but it is not always the right one. Here are a few situations where you may want to hold off before making the switch.
Refinancing Costs Outweigh Savings
Refinancing is not always beneficial if the total expenses, including legal, valuation, or administrative fees, are higher than the potential interest savings. Before switching, calculate your breakeven point to ensure that your savings truly exceed the costs involved. If the difference is minimal, it may be wiser to stay with your existing HDB loan.
HDB Loan Rates Lower Than Bank Loan
Although rare, there are times when HDB loan rates remain more stable or even lower than some bank loan packages, especially when market rates fluctuate. In such cases, refinancing may not offer any real financial advantage. Monitoring both HDB and bank rates regularly helps you decide the best time to refinance home loan.
Prefers Stable and Predictable Rates
If you value stability and peace of mind over short term guaranteed savings, staying with your HDB loan might be the better choice. HDB loans provide stable, predictable rates with no sudden changes due to market movements. This stability is ideal for homeowners who prefer steady monthly repayments and minimal financial risk.

Eligibility Criteria for HDB Loan

Understanding who qualifies for an HDB Concessionary Loan in Singapore.
Before applying for an HDB loan, it’s important to ensure that you meet the eligibility requirements set by the Housing & Development Board (HDB). These criteria are designed to help Singapore citizens purchase public housing responsibly and within their financial means.

At least one applicant must be a Singapore citizen to qualify for an HDB concessionary loan. Permanent Residents and foreigners are not eligible.

Gross monthly income not exceeding:

Applicants must not own or have disposed of any private residential property (local or overseas) within 30 months before the loan application.

The flat must have at least 20 years of remaining lease, and the loan tenure cannot exceed 25 years or extend beyond the borrower’s age of 65, whichever comes first.

Applicants must have stable employment or trade, good credit standing, and meet relevant employment duration criteria (Example: at least 3 months for fixed salary with CPF contributions, depending on the applicant’s income type.

Maintain up to $20,000 in your OA accounts per owner. Cash contribution not required.

HDB will assess your financial standing, employment stability, and credit history before granting the loan.

  • For HDB loan, the Mortgage Servicing Ratio (MSR) applies — your monthly housing loan repayments cannot exceed 30% of your gross monthly income.

Before you can proceed with your flat purchase, you must obtain a valid HDB Flat Eligibility (HFE) Letter. The letter confirms your loan amount, monthly instalment estimate, and repayment terms.

What is HDB Flat Eligibility (HFE) ?

The HDB Loan Eligibility (HFE) letter is an official document issued by the Housing and Development Board (HDB) that confirms your eligibility to obtain an HDB Concessionary Housing Loan. It states the maximum loan amount you can borrow, the estimated monthly instalment, and the repayment period based on your income and financial standing. The HLE letter is mandatory for all buyers applying for an HDB loan, whether you are purchasing a new Build To Order (BTO) flat or a resale flat. You must obtain it before committing to the flat purchase to proceed with your HDB loan application.

Key Information in the HFE Letter

  • The maximum loan amount you are eligible for

  • The estimated monthly repayment based on your income and MSR limits

  • The loan tenure, which can be up to 25 years or until age 65

  • Interest Rate

  • The validity period of the letter is nine months from the date of issue

  • Terms and Conditions

You can apply for the HFE letter directly through the HDB website using your SingPass, where your income and CPF details are automatically retrieved for faster processing.

Step-by-Step Guide to Refinance Your Home Loan

Understand each stage of the refinancing process to make confident and well-informed decisions.
refinance home loan

Review Your Current Home Loan

Start by reviewing your existing home loan terms with IQrate mortgage broker. Take note of key details such as your current interest rate, loan tenure, outstanding balance, and the rate that applies after your lock in period. It is also important to check whether your existing loan has any subsidy clawback clauses, as refinancing within the clawback period may result in additional costs. A thorough review of these factors will help you determine if refinancing will provide meaningful savings.
refinance home loan

Check Your Refinancing Eligibility

Banks in Singapore have specific criteria for refinancing, including a minimum outstanding loan amount and lock in period. Confirm that you meet these requirements before you proceed to refinance home loan.
refinance home loan

Compare Refinancing Packages and Rates

Work with a IQrate's mortgage broker to compare refinancing packages from various banks. Reviewing the latest interest rate options and loan features helps you choose the plan that best aligns with your financial goals.
refinance home loan

Assess the Total Refinancing Costs

When refinancing, you may incur legal, valuation, or even penalty fees. Carefully assess these costs against your potential savings to ensure your refinance home loan decision is financially beneficial.
refinance home loan

Prepare the Required Documents

Gather all the required documents, such as your NRIC, income statements, CPF contribution history, and details of your existing loan. Some banks allow e-submission through SingPass MyInfo for faster processing, while others require manual submission, which involves preparing supporting documents such as recent payslips, bank statements, and property details. IQrate’s mortgage advisor will guide you through these steps and ensure your refinancing application is accurately prepared and submitted.
refinance home loan

Submit Your Refinancing Application

After selecting your preferred bank and package, your mortgage advisor will help you submit the application. The bank will then review your financial profile.
refinance home loan

Receive Approval and Sign the Loan Agreement

Once your refinancing application is approved, you will review and sign the new loan agreement. Your appointed law firm will coordinate with your new lender to complete the legal and administrative process, including closing your existing home loan with your current lender. The new bank will then handle the full settlement of your outstanding mortgage balance.
refinance home loan

Completion and Start of New Loan

The bank will disburse the loan to officially discharge your previous mortgage, and your new loan will commence under the updated terms and interest rate.
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Frequently Asked Questions

Everything You Need to Know

What is a fixed rate?

Fixed Rate refers to an interest rate that remains constant for a specific period, typically ranging from 1 to 5 years. This means the borrower’s monthly mortgage payments stay the same throughout the fixed term, regardless of market interest rate fluctuations. It offers borrowers predictability and stability in managing their finances. However, if market rates fall, borrowers will not benefit from the lower rates during the fixed-rate period.

SORA (Singapore Overnight Rate Average) represents the average interest rate at which banks in Singapore lend and borrow funds from one another on an overnight basis. It is calculated based on the volume-weighted average of all actual borrowing transactions conducted between 8:00 am and 6:15 pm in the interbank market.

Refinancing means switching your existing home loan to a new package, either with the same bank or a different bank, usually to enjoy lower interest rates or better terms. By refinancing, homeowners can reduce monthly repayments and save on overall loan costs.

A Lock-in Period is the minimum time you must stay with your current home loan package before refinancing or fully repaying it. Typically lasting 2 to 5 years, it ensures the bank recovers its administrative and promotional costs. If you choose to refinance early, a penalty of about 1.5% of the outstanding loan amount may apply.

Tip: If you’re planning to sell your property during this period, do let our Mortgage Broker know! We can help you find a home loan package that offers a full 100% penalty waiver upon sale of your property.

 
 

It’s best to start searching for a refinancing offer 3 months before your lock-in ends, since banks take time to process applications and disburse funds. This ensures your new loan kicks in right after your old package’s lock-in period finishes.

Yes. Firstly, ensure that you are not within any lock-in period or that your loan package allows for partial redemption during the lock-in period. You can use your CPF (Central Provident Fund) Ordinary Account (OA) savings to repay your home loan in part or in full before maturity. The steps differ depending on whether your loan is with HDB or a bank.

For HDB loans:

  • Ensure you have sufficient funds in your CPF OA and check your maximum CPF usage limit.

  • Apply online via the HDB website or submit a CPF withdrawal form at any HDB branch.

  • Processing usually takes about three working days for online submissions and three to five working days for branch submissions.

For bank loans:

  • First, obtain approval from your bank.

  • Confirm you have enough CPF OA savings and review your usage limits through the Homeownership dashboard.

  • Submit your application online using Singpass. If you intend to fully redeem your loan, attach the bank’s redemption statement and your lawyer’s legal bill (if applicable).

  • Processing typically takes around five working days.

An IPA is a bank’s conditional approval of your home loan, based on your income, credit profile, and debt obligations. It gives you clarity on your borrowing power.

Yes. Most banks charge penalties typically 1.5% of the outstanding loan amount, if you redeem or refinance during the lock-in period. Always check your loan terms before switching.

You should compare your current loan package with available rates and factor in costs such as legal fees or penalties. IQrate helps you run these comparisons easily so you can see whether refinancing leads to real savings.

When refinancing your home loan, there are several costs to keep in mind:

  1. Legal fees – These cover the lawyer’s work in preparing, handling the loan transfer, and updating the property title. The fee is usually calculated based on your loan amount, so higher loan amounts will result in higher legal fees. Depending on the bank and law firm, fees typically range from $1,500 to $2,000.

  2. Valuation fees – Banks often require a current valuation of your property to determine its market value before approving the refinance. This fee typically starts from $150, depending on the property type, value of the property and the bank.

  3. Fire insurance / Home insurance – Some banks require that you maintain or purchase fire insurance (or home insurance) for the property as a condition for refinancing. The cost depends on the property size and coverage.

  4. Early redemption / penalty fees – If you’re refinancing during your existing loan’s lock-in period, the bank may charge a penalty, often 1.5% of your outstanding loan.

Many banks offer subsidies or rebates on some of these fees to encourage refinancing. IQrate’s platform helps you compare packages, factoring in these costs so you can see the true savings after refinancing.

When refinancing your home loan, there are several costs to keep in mind:

  1. Legal fees – These cover the lawyer’s work in preparing and submitting the refinancing documents, handling the loan transfer, and updating the property title. The fee is usually calculated based on your loan amount, so higher loan amounts will result in higher legal fees. Depending on the bank and law firm, fees typically range from $1,500 to $2,000.

  2. Valuation fees – Banks often require a current valuation of your property to determine its market value before approving the refinance. This fee typically starts from $150 , depending on the property type and bank.

  3. Fire insurance / Home insurance – Some banks require that you maintain or purchase fire insurance (or home insurance) for the property as a condition for refinancing. The cost depends on the property size and coverage.

  4. Early redemption / penalty fees – If you’re refinancing during your existing loan’s lock-in period, the bank may charge a penalty, often 1.5% of your outstanding loan.

Many banks offer subsidies or rebates on some of these fees to encourage refinancing. IQrate’s platform helps you compare packages, factoring in these costs so you can see the true savings after refinancing.

Yes, several banks in Singapore offer subsidies to refinance home loans. For HDB properties, if your outstanding loan amount exceeds S$300,000, many banks provide full subsidies to cover legal and valuation fees. For private properties, banks typically offer cash subsidies to offset refinancing expenses when your remaining loan balance is above S$500,000.

Do note that these subsidies generally come with a three-year clawback period. This means if you switch banks or fully redeem your loan within that period, the subsidies may need to be repaid. While there are occasional exceptions, they are uncommon and should be reviewed carefully before proceeding.

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