Home Loan Refinancing in Singapore: Your Questions Answered
These are the questions people ask most often about home loan refinancing. Each answer is short; follow the links for the full detail.
What does a home loan refinancing calculation tell me?
Compares your current mortgage with a new rate to show the monthly saving and how long switching costs take to recover.
What is the formula?
Saving = PMT(current rate) − PMT(new rate); breakeven = switching costs ÷ monthly saving.
What do I need to enter?
Outstanding loan (S$), Current rate (%), New rate (%), Remaining tenure (years), Switching costs (S$).
Should I rely on this before signing?
Use it to plan, then confirm the figures with your banker, lawyer or the IRAS stamp duty calculator before you exercise an option to purchase.
Can you show an example?
For example, with these inputs:
- Outstanding loan (S$): 600,000
- Current rate (%): 3.8
- New rate (%): 2.9
- Remaining tenure (years): 22
- Switching costs (S$): 3,000
the calculator returns:
- Current instalment: S$3,356.97
- New instalment: S$3,076.95
- Monthly saving: S$280.02
- Months to recover costs: 10.71 months
Any tips?
- HDB loans are capped at 25 years and must be fully repaid by age 65.
- Seller's Stamp Duty can wipe out the gains on a quick resale, so check your holding period before selling.
- Stamp duty is based on the purchase price or market value, whichever is higher.
Background
Most Singaporeans live in HDB flats, which can be financed with an HDB concessionary loan at 0.1% above the CPF Ordinary Account rate or with a bank loan. Private property must be financed with a bank loan, and banks offer fixed, floating and SORA-pegged packages.
The Total Debt Servicing Ratio limits monthly debt repayments to 55% of gross monthly income for any property loan, and the Mortgage Servicing Ratio limits the housing instalment to 30% of income for HDB flats and new executive condominiums. Banks apply a medium-term interest rate in these tests rather than the rate you will actually pay.
CPF Ordinary Account savings can pay for the downpayment, stamp duties and monthly instalments, but using CPF reduces the money compounding for retirement, and the amount withdrawn plus accrued interest must be refunded to your CPF account when you sell.
Related calculations
- Property Downpayment Calculator: Splits the downpayment into cash and CPF and shows the remaining loan.
- Buyer's Stamp Duty (BSD) Calculator: Calculates Buyer's Stamp Duty on a Singapore residential property using the tiered rates from 1% to 6%.
- Additional Buyer's Stamp Duty (ABSD) Calculator: Calculates ABSD by buyer profile and the number of residential properties owned, using the rates in force since 27 April 2023.
- Total Property Stamp Duty Calculator: Adds BSD and ABSD together so you know the full stamp duty bill before you sign an option to purchase.
Try it yourself with the Home Loan Refinancing Calculator.
Run your own numbers: Home Loan Refinancing Calculator