When does refinancing actually pay back?
Not a forecast. A breakeven: what the switch costs you, what it saves each month, and how long the saving takes to repay the cost. The two things that decide it are your rate gap and whether you are inside a lock-in — and the lock-in moves the answer by more than any plausible view on where rates are going.
The rates are yours to supply. This site publishes benchmarks, not bank package rates, and does not quote them — the defaults here are illustrative figures to start from, not an offer anyone has made you.
The breakeven
Saved each month
$471
$2,639 now against $2,168 after.
Cost of switching
$3,000
Fees only — no lock-in penalty.
Breaks even in
6.4 mo
Against 300 months left on the loan.
Switching saves $471 a month and costs $3,000, so it repays itself in 6.4 months — well inside the 300 months left. Over the remaining term the net saving is $138,267.
Does your decision depend on where rates go?
This is the honest substitute for a forecast. The same switch, priced across the range of rates you might plausibly be offered — so you can see whether the case for switching survives being wrong about rates.
| If you can get | Saved monthly | Breaks even in | Net over 300 months |
|---|---|---|---|
| 1.50% | $640 | 4.7 mo | $188,851 |
| 2.00% | $520 | 5.8 mo | $152,974 |
| 2.50% | $396 | 7.6 mo | $115,830 |
| 3.00% | $268 | 11.2 mo | $77,438 |
| 3.50% | $136 | 22.0 mo | $37,820 |
| 4.00% | — | never | -$3,000 |
Your decision does not depend on where rates go. At every rate in this band the switch repays its costs inside the 300 months you have left. You do not need anyone’s forecast to make this call, which is just as well, because nobody has a reliable one.
What this does not do
- It does not forecast rates, and it never will. This site has no forecasting instrument and publishes none. What it can show you is what rates have actually done — the full monthly series, and where the benchmark sits now — which is a measurement.
- It does not know what any bank will offer you. The rates on this page are the ones you typed. Singapore’s published statistics cover benchmarks — SORA and the government yield curve — not the packages banks quote, which move weekly and are often given only on enquiry.
- It holds the remaining term fixed. A refinance that also stretches the term lowers the monthly payment while raising total interest. That is a different transaction, and mixing it in would make a worse deal look better.
- It ignores everything that is not the rate. Moving between an HDB concessionary loan and a bank loan changes eligibility, the deposit rules and what CPF can be used for. Those can matter more than the rate and none of them are modelled here.
- It does not advise. Arithmetic over rates you supply is factual; whether you should switch is not, and nothing here is a recommendation.
Show the figures
| Input | Value used |
|---|---|
| Outstanding balance | $500,000 |
| Years remaining | 25 |
| Current rate | 4.00% |
| New rate | 2.20% |
| Conveyancing and valuation | $3,000 |
| Lock-in penalty | none |
| Legal subsidy clawback | $0 |
Questions people ask
- When is it worth refinancing a home loan in Singapore?
- When the monthly saving repays the cost of switching well inside the time you intend to keep the loan. Two things decide it, and both are facts you already have rather than forecasts: the gap between your rate and what you can get, and whether you are inside a lock-in. On a $500,000 balance with 25 years left and about $3,000 of conveyancing and valuation, moving from 4.0 to 2.2 per cent repays itself in roughly six months. The same move inside a 1.5 per cent lock-in takes about twenty-two months, because the penalty adds $7,500 to the cost. A move from 2.5 to 2.2 per cent takes about forty months out of lock-in and over eleven years inside one.
- Should I wait for interest rates to fall further before refinancing?
- This page will not tell you, because nobody can and it would be dishonest to pretend. What it does instead is show the breakeven across a band of rates, so you can see whether your decision actually depends on the answer. Usually it does not: if a switch repays its costs inside a year at every rate in the band, the case for it does not rest on a prediction. If it only works at the bottom of the band, you now know the decision is finely balanced — which is more useful than a confident guess.
- How much does it cost to refinance in Singapore?
- Conveyancing and valuation are the unavoidable part, commonly a few thousand dollars in total, and some banks subsidise some of it. The expensive part is conditional: redeeming inside a lock-in typically triggers a prepayment penalty charged as a percentage of the outstanding balance, and leaving early can claw back a legal subsidy the existing package gave you. On a $500,000 balance a 1.5 per cent penalty is $7,500, which is several times the conveyancing. Enter your own figures above — the defaults are illustrative, not quotes.
- Does a lower rate always mean a lower monthly payment?
- On the same remaining term, yes, and that is what this page compares. But a refinance often comes with a new term, and stretching the term lowers the monthly payment while increasing the total interest — which is a different transaction from getting a better rate, even though it looks the same on a monthly figure. The calculation here holds the remaining term fixed so that the rate is the only thing changing. If you are also changing the term, the monthly saving shown here is not the whole story.
- Is this financial advice?
- No. It computes; it does not advise. The arithmetic of a breakeven is factual; whether you should switch depends on your circumstances, your plans for the property and terms no calculator can see. The rates here are whatever you type in — this site does not source bank package rates and does not quote them. Nothing on this page is a recommendation to take, keep or refinance any loan.