When Is A Good Time To Refinance My Home Mortgage in Singapore?

There's no single "best" time to refinance, but certain situations make it particularly advantageous, such as:

End of Lock-in Period

Most home loans in Singapore come with a lock-in period, typically 2-3 years. Refinancing during this period usually incurs penalties. When your lock-in period ends, you gain the freedom to switch to a new loan without extra costs. This is an ideal time to explore the best refinancing home loan options, and potentially secure a lower interest rate.

There's Great Fluctuations in Market Interest Rate

Keep an eye on the market! When interest rates drop significantly, it offers a good opportunity to refinance your home loan. By securing a new loan at a lower rate, you can reduce your monthly repayments and save on total interest paid. However, remember that interest rates can fluctuate, so it's crucial to compare the home loan refinance rates in Singapore, and choose a loan that aligns with your long-term financial goals.

When There's New Regulatory Changes

Occasionally, regulatory changes can impact mortgage refinance in Singapore. These changes might affect loan-to-value (LTV) limits, Total Debt Servicing Ratio (TDSR) requirements or other factors that determine your eligibility for refinancing. Stay informed about any new regulations and assess whether refinancing could be beneficial in light of these changes.

When There's Big Changes In Your Life

Life throws curveballs! Significant life events can create a need for refinancing. This could include:

• Needing Cash Flow: If you require a cash injection to address a financial challenge or pursue a new opportunity, a cash-out refinance can help.
• Improved Financial Situation: If your financial situation has improved, you might want to shorten your loan tenure and pay off your mortgage faster. Refinancing can help you achieve this, especially if your current loan doesn't offer the flexibility to adjust your repayment schedule.

The Differences Between Refinance vs Reprice

It's easy to get confused between refinancing and repricing. Both involve changing your home loan terms, and in fact, mortgage brokers don't earn a commission from repricing. Let's break down the key differences below:

By refinancing, you gain access to a wider range of loan options. This could potentially lead to maximum interest savings, and a mortgage package best tailored to your specific needs — especially beneficial if you’re paying more than you should on your existing home loan.

While repricing is quicker and less expensive, it limits your choices and potential savings. However, should repricing prove to be more beneficial in your situation, we'll be upfront and suggest it accordingly. Our aim is always to provide you with the best financial advice, and that includes helping you secure a loan that perfectly suits your needs.

What Are The Other Fees Involved In Home Loan Refinancing?

While securing the best refinancing home loan often means focusing on interest rates, it's equally important to understand the associated fees. Here's a breakdown of the costs you might encounter when refinancing:

• Legal Fees: These cover the legal work involved in transferring your mortgage to a new lender. For private properties, legal fees typically range from $1,800 to $2,000, while for HDB flats, they are usually around $1,500-$1,600.
• Valuation Fees: Lenders may require a valuation report to assess your property's current market value. This fee can range from $150 to $700 for private properties and $150 to $200 for HDB flats.