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Guide to Refinance Home Loan

Refinancing your home loan in Singapore lets you switch to a new mortgage with better terms and lower interest rates, helping you achieve meaningful savings. This guide explains how to refinance your home loan to align with your financial goals.

What It Means to Refinance a Home Loan

Home loan refinancing is the process of replacing your existing mortgage with a new one, often from a different lender, to secure better terms or lower interest rates. When you refinance home loan, you take up a new mortgage to pay off your current one, with the option to adjust your interest rate, loan tenure, or repayment structure. 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 Home Loan

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 high 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.

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.

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.

Your property is more than just a home, it is also a valuable asset. By choosing to refinance home loan, you can unlock part of your home’s equity and turn it into usable cash. This extra funding can be used for home renovations, education expenses, investments, or even to start a new business. Accessing your home equity through refinancing allows you to make the most of your property’s value without needing to sell it, giving you greater financial flexibility to achieve your goals.

When to Refinance Home 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.

After Your Lock-in Period Ends

Most home loans in Singapore come with a lock-in period of around two to three years. Once this period ends, you’re free to switch lenders without facing penalty fees. This is the perfect time to compare the latest refinance home loan packages and secure a lower rate that suits your financial needs.

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.

💡 Tip: Start your refinancing process about 3 months before your lock in period ends to ensure a smooth transition and avoid higher rates. Do take note of the legal and valuation costs involved, and if the savings outweigh these fees, it makes sense to proceed. For a detailed comparison or help finding the best refinance home loan package, feel free to contact us.

When not to Refinance Home 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

Every refinancing comes with certain expenses such as legal and valuation fees. In some cases, you may also face cancellation fees or subsidy clawbacks from your existing bank. Always calculate whether the total savings from your new package will truly outweigh these costs before deciding to refinance home loan.

Planning to Sell Your Property Soon

Refinancing and repricing your mortgage usually starts a new lock in period. If you sell your property or redeem your loan early during this time, the bank may charge a penalty of about 1.5% of the outstanding amount. Consider your future plans carefully before committing to a new home loan.

Competitive Repricing Rate Offered

At times, the repricing rate provided by your current bank after the lock in period may still be more attractive than the prevailing market offers. If your existing rate remains competitive, refinancing may not provide significant benefits. It is advisable to monitor market trends and only refinance home loan when it delivers clear financial advantages.

Click here to learn more about the difference between repricing and refinancing a home loan in Singapore, and find out which option best suits your needs.

Understanding Common Refinancing Charges

What Is a Cancellation Fee?

A cancellation fee is charged by a bank when you decide not to proceed with a loan after the Letter of Offer has been accepted and the loan is in progress but not yet disbursed.

It compensates the bank for the administrative and legal work already done to prepare your loan. Cancellation fees are typically around 0.75% to 1.5% of the loan amount, depending on the bank’s policy.

What Is a Subsidy Clawback?

A subsidy clawback refers to a condition where the bank requires you to repay part of a subsidy or incentive that was granted when you initially took a home loan. This repayment becomes due under certain circumstances, such as when you refinance or sell the property earlier than stipulated typicaly 3 years.

💡 Example: A homeowner refinanced their home loan to Bank A and received a $2,500 subsidy. The loan agreement stated a 3-year clawback period. If they refinance again before 3 years are up, they must repay the $2,500.

Eligibility Criteria for Home Loan Refinancing

Understand what banks look for before approving your refinance home loan application.

Before you can refinance home loan in Singapore, banks will assess several key factors to determine your eligibility. These criteria help lenders evaluate your repayment ability, financial stability, and timing for refinancing.

Minimum Loan Amount

Banks in Singapore typically require a minimum outstanding loan amount before approving a refinancing application. This threshold helps ensure that the potential savings from refinancing outweigh the administrative and legal costs involved.

For most banks, the minimum loan amount ranges between S$100,000 and S$200,000, depending on the lender and property type. If your outstanding balance is below this amount, refinancing may not be cost-effective due to processing fees, valuation charges, and legal costs.

To determine whether it’s worthwhile to refinance home loan, it’s best to consult our mortgage broker, who can calculate your potential savings and compare available packages across different banks.

Current Home Loan Lock-in Period / Expiry Date

If your existing home loan is still within its lock-in period, refinancing may lead to penalty fees. It’s best to start your refinancing process 3 months before your lock-in period ends to ensure a smooth transition and avoid unnecessary costs.

Subsidy Clawbacks

Some banks provide subsidies such as legal or valuation fee reimbursements when you first take up your loan. If you refinance within a certain period (usually 3 years), these subsidies may need to be repaid. Always check your existing loan agreement for any subsidy clawback clauses before proceeding.

Credit Score and Repayment History

A good credit score and a consistent repayment track record increase your chances of approval. Banks prefer borrowers with a strong financial background and a low risk of default.

Income and Debt Servicing Ratio (TDSR)

Your eligibility to refinance home loan largely depends on your overall debt level. Under the Total Debt Servicing Ratio (TDSR) framework, your total monthly debt repayments, including housing, car, and credit card loans, must not exceed 55% of your gross monthly income. If you have taken on new commitments since your last mortgage, such as a car loan or credit card, these will be included in the calculation.

However, there are certain TDSR exemptions. For owner occupied properties, borrowers are allowed to refinance even if they exceed the 55% TDSR limit, as long as there is no increase in the loan amount. For investment properties, refinancing is permitted if the borrower commits to a minimum 3% loan reduction plan over a set period. These exemptions provide flexibility for homeowners and investors who may otherwise be restricted by the standard TDSR rules.

By understanding these guidelines and exemptions, you can better plan your refinancing strategy and determine whether you qualify to refinance home loan under current MAS regulations.

Employment Stability and Age

Banks consider your employment stability and age when determining loan tenure. A steady income stream and job consistency strengthen your application.

TDSR and MSR Exemptions for Refinancing

When refinancing, borrowers may be exempted from the TDSR or MSR framework in specific situations especially for owner-occupied properties or investment properties under certain conditions.

Property Type	Applicable Framework	Exemption Condition	Key Notes
Owner-Occupied Private Property	TDSR applies	Exempted from TDSR if there is no increase in loan amount	Borrowers can refinance even if TDSR exceeds 55%, as long as the loan amount remains the same or is reduced.
Investment Private Property	TDSR applies	Allowed to refinance if borrower commits to a 3% loan reduction plan over the next few years	To reduce the outstanding loan balance by at least 3% helps qualify for refinancing despite breaching TDSR.
HDB or EC (Within MOP) (Owner-Occupied)	TDSR & MSR applies	Exempted from TDSR & MSR if there is no increase in loan amount	Borrowers can refinance even if MSR (30%) & TDSR (55%) exceed, as long as the loan amount remains the same or is reduced.

How Banks Classify Owner-Occupied and Investment Private Properties

Owner-Occupied Private Property

An owner-occupied property refers to a private home that the borrower or their immediate family members personally reside in. This can include condominiums or landed homes that are used as the main place of residence.

To qualify as owner-occupied, banks will typically require proof of residence, such as:

The residential address stated on your NRIC, and
The IRAS records must reflect the same address and confirm that the property is assessed under the owner-occupied tax rate.

Investment Private Property

An investment property is a private residential property that is not occupied by the borrower or their immediate family, and is instead held for rental income or long-term capital gain. This includes secondary homes, rental units, or properties purchased under company or trust ownership.

For such properties, the address reflected in your NRIC and IRAS records will not match the property address, confirming that it is used for investment rather than personal residence.

Borrowing Entity Changes Without Change of Ownership

Understanding how refinancing works when the borrower entity changes but property ownership remains the same.

In some cases, homeowners may wish to change the borrowing entity for their property while keeping the legal ownership unchanged. This typically happens when refinancing from:

A single borrower to joint borrowers (e.g. adding a spouse or family member), or
A joint borrower to a single borrower, while the property title remains under the same owner’s name.

How It Works

When there is no change in property ownership, the refinancing is treated as a change in borrower structure, not a sale or transfer. However, the new borrower(s) must still meet the bank’s credit assessment and eligibility requirements, including checks on TDSR, LTV, and income stability.

Key Considerations

Legal Documentation

The existing mortgage charge will need to be discharged and re-lodged under the updated borrower names.

Bank’s Approval

The new borrower(s) must satisfy the bank’s credit evaluation process, and some banks may treat this as a new loan application.

Stamp Duty

Since there is no change in legal ownership, no Additional Buyer’s Stamp Duty (ABSD) or Seller’s Stamp Duty (SSD) will apply.

Loan Terms

Depending on the borrower’s financial profile, the revised loan may have different interest rates or tenure options.

💡 Example: A property currently financed under one individual borrower may be refinanced under a joint application with a spouse to strengthen income eligibility and improve loan approval chances. Since the property ownership remains unchanged, this is considered a borrowing entity change rather than a transfer of ownership, and no ABSD or SSD applies.

Step-by-Step Guide to Refinance Your Home Loan

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

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.

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.

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.

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.

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.

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

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.

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.

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.

What is a floating (SORA) rate?

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.

What is mortgage refinancing?

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.

What is a Lock-in Period?

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.

How early should I secure a refinance offer before my lock-in period ends?

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.

Can I use my CPF savings to pay off my home loan early, either partially or in full?

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.

What is an In-Principle Approval (IPA), and why is it important?

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.

Are there penalties if I refinance or redeem my home loan early?

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.

How do I know if mortgage refinancing will save me money?

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.

What fees should I expect when refinancing my property loan?

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

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.
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.
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.
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.

Are there any subsidies available for refinancing home loans?

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

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.
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.
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.
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.

How can IQrate help me compare and secure the best mortgage loan across banks?

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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