A lower rate is not the same as a saving. Work out how many months it takes before the fees are recovered — and whether that happens before your new rate resets.
Rules verified against MAS on
Your loan
How long the new rate is guaranteed.
Cost of switching
Conveyancing for a refinance typically runs S$1,800–3,000. Many banks offer a legal subsidy that covers most of it — but the subsidy is usually clawed back if you redeem or refinance again within three years.
A fresh valuation is normally required, typically S$300–800 depending on property type.
A prepayment penalty of roughly 0.75%–1.5% of the outstanding amount applies if you redeem during the lock-in period. Outside lock-in it is normally nil.
If your current package came with a legal or valuation subsidy and you are still inside its clawback window (commonly three years), that subsidy becomes repayable.
Verdict
Worth doing on these numbers
You recover the switching cost in 9 months, comfortably inside the 2-year package. Net gain over the package period: S$9,928.
If the new rate somehow held for all 20 remaining years, the net gain would be S$79,014. It will not — the rate resets after 2 years. That larger number is what most refinance calculators show you.
Almost every refinance calculator in this market multiplies your monthly saving by the full remaining tenure. That assumes the new rate lasts twenty years. It does not — a fixed or promotional rate holds for its package period, commonly two or three years, and then reverts to whatever the bank is charging at the time.
On the default scenario above the difference is roughly eightfold. The number you can actually rely on is the one over the package period, because that is the only stretch where you know both rates. Everything after that is a fresh decision you will make again.
The practical test is simple: does break-even fall inside the package period? If it does, the move pays for itself before you have to think about rates again. If it does not, you are betting on being able to reprice well at the end — which may be fine, but it is a bet rather than a saving.
Regulatory rules verified against MAS on . Fee defaults are market-typical ranges, not regulated amounts — your lender's actual figures will differ, and the result is only as good as the numbers you enter. This is an estimate, not an offer or advice.
For the full picture — when to move, what repricing costs instead, and the notice period your bank needs — read our guide to refinancing a home loan in Singapore.