A lower mortgage instalment is useful only if the switch leaves you better off over the period you expect to keep the loan. Compare staying, repricing with the current bank and refinancing with a new lender using the same outstanding balance and repayment horizon. Then account for fees, exit conditions and the balance still owed.
Start with the existing loan, not a headline rate
MoneySense explains refinancing and repricing and recommends comparing repayment schedules, interest and effective interest rates. It also identifies termination penalties, subsidy clawbacks, legal charges and conversion fees as questions for the lender. Their amounts and conditions come from the actual package.
Ask for the outstanding principal on the proposed changeover date, the current repayment schedule, the rate after any promotional period and the terms for leaving. Record the lock-in end, subsidy-clawback end and required redemption notice separately. They need not be the same date. A penalty-free redemption date does not by itself prove that no other charge remains.
Get a written repricing quotation as well as an outside refinancing quotation. Staying with the current bank is a real option, and neither route is always cheaper. Put any cash payment, subsidy conditions, valuation requirement and new restriction in the comparison.
Cash-flow break-even is a first screen
Suppose three invented quotations have monthly payments of S$4,000 to stay, S$3,850 to reprice and S$3,700 to refinance. Their upfront charges and combined payments are shown below. Assume they remain constant for 24 months, with no subsidy repayment or other exit charge within that period. These are not available rates or bank offers.
| Option | Upfront charge | 24 payments plus charge |
|---|---|---|
| Stay | S$0 | S$96,000 |
| Reprice | S$800 | S$93,200 |
| Refinance | S$3,600 | S$92,400 |
On that cash-flow screen, repricing reduces outgoings by S$2,800 against staying; refinancing reduces them by S$3,600. Refinancing’s advantage over repricing is S$800 over the two years, despite its S$150 lower monthly payment.
Against staying, the S$3,600 refinance charge takes 12 months of S$300 lower payments to recover. Against repricing, the extra S$2,800 upfront charge takes about 18.7 months of S$150 lower payments, so the nineteenth monthly saving crosses that simple threshold. A likely sale after twelve months changes the question substantially.
Lower payments are not the same as lower interest
The table compares money paid out, not the full economic cost of each loan. A lower payment may result from a longer tenure and leave more principal outstanding. Obtain the balance after 24 months for each quotation and compare interest charged over the same period, alongside fees and any sale or redemption charges. Do not describe the full instalment difference as interest saved.
For example, if the refinance option leaves S$5,000 more principal outstanding than repricing after the comparison period, its S$800 cash-flow advantage does not establish a cheaper loan overall. Both the payments and the remaining debt belong in the decision. This is a hypothetical adjustment, not a prediction of how a bank will amortise a loan.
Separate any longer-term rate assumption from a quoted fixed period. A projection holding today’s rate for the rest of the mortgage is a scenario, not the bank’s promise. Test the payment after the initial period and keep enough room for household expenses.
Do not spend a conditional subsidy twice
If a lender offers a subsidy, note when it is received and when it could be repayable. An assumed S$2,000 subsidy reduces S$3,600 of costs to S$1,600 only if it is actually retained. If leaving early requires that amount back, put the repayment into the exit scenario. Use written conditions rather than treating the subsidy as unconditional cash.
Partial prepayment is another option, subject to the package’s charges and conditions. Compare the interest benefit with the accessible cash left afterwards. A smaller mortgage may be valuable, but money paid into the loan is no longer the same immediately available emergency reserve.
Coordinate the changeover
Have the bank and property lawyer align the redemption date, notice, funds and new repayment arrangements. Keep the existing payment method working until the lender confirms the change. Verify the first new instalment and old-loan redemption rather than cancelling payments on an assumed date.
This guide does not assume an exemption from a lender’s eligibility assessment or a universal notice period. HDB borrowers considering a bank loan also need to understand the change of financing route: MoneySense states that an existing bank loan cannot be refinanced back into an HDB loan.
Use the lock-in and subsidy-clawback guide for the separate date checks and the refinancing changeover guide for documents and payment coordination. Lin Xuan or Ade can introduce bankers for actual quotations and property lawyers where needed.
Correction, 24 October 2026: earlier claims about standard rates, guaranteed savings, universal fees, a mandatory three-month notice, credit-scoring treatment and blanket refinancing exemptions have been removed. The previous S$3,000 divided by S$400 example implied 7.5 months, not the stated 13 months; its graphic has been withdrawn.
Singapore River at Robertson Quay, photographed 14 August 2022. Photo: Wzhkevin, Wikimedia Commons. CC BY-SA 4.0. Resized for web. Neighbourhood context, not a valuation. Source: https://commons.wikimedia.org/wiki/File:Singapore_River_at_Robertson_Quay_-_2022-08-14.jpg. Licence: https://creativecommons.org/licenses/by-sa/4.0/.
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