How to Refinance a Mortgage in Singapore

In a nutshell, refinancing your home loan is switching from your current home loan to an entirely new one, usually from a different bank or financial institution. Alternatively, you'll also be refinancing if you're switching from an HDB concessionary housing loan to a bank loan.

When you refinance, you don’t buy a new property—instead, a new loan will be issued by a different bank or financial institution to pay off your current mortgage. This new loan may come with different terms, interest rates, or repayment durations. However, if you currently have an HDB loan, you may refinance it with a bank or other financial institution. However, it’s important to note that refinancing a bank loan back to an HDB loan is not permitted.

Much like applying for an original mortgage, refinancing requires submitting an application, going through approval and underwriting, and completing the loan closing process. The new lender pays off the old mortgage, and you begin making payments on the new loan.

» MORE: Shop for home loans in Singapore

Refinancing makes the most financial sense when current mortgage loan rates are lower than when you purchased your home. A lower rate typically entails lower monthly payments and reduced total interest over the loan's tenure.

However, if you’re refinancing for reasons like switching loan types or removing mortgage insurance, you should still assess whether the cost of refinancing is justified. Depending on how much rates have risen, it may be more cost-effective to stick with your original mortgage.

While mortgage rates are influenced by market conditions, and you can't control when they drop, there are factors you can influence, such as your credit score. If you have a better credit score since purchasing your home, you may be able to refinance at a more favourable rate.

» MORE: See today’s refinance rates

These are a few reasons why you should refinance your home:

Lower your monthly payment

It goes without saying that refinancing is usually a strategic move on the homeowner’s part to enjoy more savings and hopefully free up cash flow. This is achieved by getting a new home loan package with a lower interest rate and potentially lower monthly loan repayments as well.

» MORE: Learn about floating rates vs fixed interest rates.

Pay off your loan faster

Switching from a longer loan tenure to a shorter loan tenure helps you pay down your mortgage faster and save on interest. But, as a result, your monthly payment will likely be higher.

Extend the loan term

If you're looking to ease your financial burden, refinancing to a longer loan term could help minimise your monthly payments. However, it's important to note that the maximum loan term varies by property type. For HDB properties, the maximum term is 25 years minus the number of years since your first housing loan was disbursed. For non-HDB properties, the maximum term is 30 years minus the years since your first mortgage loan was issued.

While extending the loan term lowers monthly payments, it may also increase the total interest paid over the tenure of the loan. Therefore, before refinancing, consider other alternatives for lowering your monthly mortgage payments and carefully weigh the pros and cons of each approach.

Access your home’s equity

A home equity loan, also known as cash-out refinancing, comes in handy if you find yourself in debt or in urgent need of cash. You can use your property as collateral to loan a substantial sum of money if the loan is approved.

But it’s important to note that this option is only possible for private properties.

Reduces loan insurance costs

Refinancing may trigger a reassessment of your insurance coverage based on your new loan terms, which can result in a lower premium. This is especially true if you have acquired a more favourable interest rate when you refinance your loan. 

If you're covered under the Home Protection Scheme (HPS), your coverage is automatically adjusted when your loan quantum or repayment period is reduced. 

But if you’re under an HPS exemption and are using a Mortgage Reducing Term Assurance (MRTA) insurance, it’s important to check its policy to see if it covers refinancing.

Consolidate debt

If you're currently juggling multiple high-interest debts, refinancing your home loan can offer a practical solution through debt consolidation. When you combine your existing debts into a single loan, you can simplify your repayments and gain better control over your monthly finances.

Debt consolidation loans generally come with much lower interest rates compared to unsecured lending options. However, qualifying for a debt consolidation loan depends on factors such as your creditworthiness and remaining debt servicing capacity. Ensuring a solid credit score and manageable debt levels improves your chances of approval.

» MORE: When should you start planning to refinance your mortgage?

Mortgage refinancing will vary in costs. It typically depends on the bank and your existing loan terms. Common fees you may encounter include cancellation fees, prepayment penalties, reimbursement fees, legal fees, valuation fees, and conversion charges.

It’s important to review your original loan agreement carefully to understand which of these fees may apply, as they can impact the overall savings from refinancing.

» MORE: When should you start planning to refinance your mortgage?

Ready to refinance? The next step is to do some homework and find a deal that gives you the most value.

• Compare offers from multiple lenders: It's important not to settle for the first refinancing offer you see. Reach out to at least three financial institutions to find the best refinance rate. Then, request a Loan Estimate that outlines key terms, potential monthly payments, and other fees.

• Check using a mortgage refinance calculator: After gathering your offers, consider using an online refinance calculator to weigh them against your current mortgage. This tool can help you visualise how much you stand to save each month and over the lifetime of your loan.

• Know your break-even point: Refinancing isn’t free. You’ll likely face upfront costs, like cancellation fees, valuation fees, and other fees. Therefore, it’s important to calculate how long it’ll take for your savings to cover those initial expenses. It could take a few years for a refinance to break even, which entails the accumulated monthly savings to be more than the refinancing closing costs.

» MORE: How to minimise your home loan costs

Thinking of refinancing your mortgage? We give you a step-by-step guide on how to approach it with confidence:

1. Define your refinancing objective: Start by identifying what you hope to achieve. Are you looking to lower your monthly repayments or switch to a shorter loan tenure? Knowing your goals can help you select a suitable refinancing option.

2. Compare lenders for the best rates: Visit comparison sites like SingSaver. It allows you to see all the different home loan packages offered by banks in one go. If you’re out of your lock-in period and you’re able to maximise savings, it could be in your best interest to refinance. 

3. Choose a refinance lender: Once you have narrowed down your search, take time to review and compare the loan terms, interest rates, fees, and closing costs. This will help you determine which offer gives you the best value.

4. Calculate the necessary costs: Now that you’ve decided to refinance, the next best move is to calculate and prepare the upfront costs that come with the refinancing process. Fees may vary depending on the bank, so budget accordingly.

5. Submit your loan application: This is when the paperwork comes in, as the bank would need to assess your financial background before they can approve your loan. You would need to provide a wide range of documents, such as your CPF contribution history and bank loan statements, among others. Once you’ve submitted the required documents, all that’s left to do is wait for the loan approval from your bank of choice.

» MORE FOR SINGAPOREAN READERS: Home loans in Singapore (2025): Best mortgage rates to consider