What are the four costs of refinancing?
Two are unavoidable and two depend on where you are in your current package. Every quote you are given will cover the first two and stay quiet about the other two, because they are costs your current bank imposes, not the new one.
| Cost | Typical amount | When it applies |
|---|---|---|
| Legal / conveyancing | S$1,800–3,000 | Always. Often subsidised by the incoming bank. |
| Valuation | S$300–800 | Always. Varies by property type. |
| Prepayment penalty | 0.75%–1.5% of outstanding | Only if you redeem inside your current lock-in. |
| Subsidy clawback | Whatever you were given | Only if you are inside the clawback window, commonly 3 years. |
The defaults used across this site are S$2,500 legal and S$500 valuation — mid-range figures, not quotes. Use the numbers your own lender gives you.
How much are the legal fees, and who pays them?
Conveyancing on a refinance typically runs S$1,800–3,000. It is less work than a purchase — no title transfer, no stamp duty — but the new lender still needs a solicitor to discharge the old mortgage and register the new one.
Most banks offer a legal subsidy that covers most or all of it, sometimes as a cash rebate paid on completion. That is genuinely money off, with one condition attached: it comes back if you leave early. Which brings us to the cost that catches people out.
What is a legal subsidy clawback?
When a bank pays your legal fees to win your business, the offer almost always carries a clawback window — commonly three years. Redeem or refinance away inside that window and the subsidy becomes repayable in full.
This matters because the natural refinancing rhythm is two to three years, set by lock-in periods. So the moment your lock-in ends and you are free to move without a penalty, you may still be inside the clawback window of the subsidy that got you here. The two clocks do not run together, and nobody points that out.
Find the clawback date on your current facility letter before you start shopping. It is the one cost that is invisible on every comparison table and decides a surprising number of these cases.
What is the penalty for refinancing during lock-in?
Roughly 0.75% to 1.5% of the outstanding amount, charged by your current bank for redeeming the loan early. Outside the lock-in period it is normally nil.
On S$600,000, a 1.5% penalty is S$9,000. That is usually enough on its own to push break-even past the end of the new package — meaning you would pay the cost now and not recover it before the rate resets again.
The exception is a large rate gap on a large balance late in a lock-in. Run it rather than assuming — but assume it does not pay until the arithmetic says otherwise.
How much do the penalties actually change the answer?
The same switch, four times: S$600,000 outstanding, 20 years remaining, 4.2% moving to 3.1% on a 2-year package. Only the costs differ.
| Situation | Total cost | Break-even | Net over 2 years | Verdict |
|---|---|---|---|---|
| Clean — outside lock-in, no clawback | S$3,000 | 9 months | S$9,928 | Worth doing |
| Inside lock-in (1.5% penalty) | S$12,000 | 35 months | S$928 | Marginal |
| Inside clawback window (S$2,500) | S$5,500 | 16 months | S$7,428 | Worth doing |
| Both | S$14,500 | 42 months | −S$1,572 | Not worth it |
The rate gap is identical in all four rows. What changes the answer is entirely on your current bank's side of the deal.
How do I keep the costs down?
Mostly by timing, and partly by asking your existing bank first.
- Check your facility letter for both dates — lock-in expiry and subsidy clawback expiry. They are usually different.
- Start four to five months before lock-in ends, since most lenders need about three months' notice of redemption.
- Ask your current bank to reprice before you move. Repricing avoids the legal and valuation fees entirely.
- Ask the incoming bank for the legal subsidy amount and its clawback window in writing, not just the rate.
- If the subsidy is a cash rebate, confirm whether it is paid on completion or spread — it changes when you are actually out of pocket.
When do the costs make refinancing not worth it?
When the interest saved over the new package period does not exceed them. That is the whole test, and the balance decides it more than the rate gap does.
On S$600,000 a S$3,000 cost is recovered in 9 months. The same rate gap on a S$200,000 balance produces about a third of the monthly saving against exactly the same fixed fees, which pushes break-even well past two years.
Rules of thumb like "a 0.5% gap is worth switching" ignore this entirely. Two borrowers with the same rate gap can get opposite answers.
Work out your own number
Refinance Break-Even Calculator
Has fields for the prepayment penalty and the clawback, because leaving them out is how a switch looks better than it is.
Open the calculator →Frequently asked questions
How much does it cost to refinance a home loan in Singapore?
Typically S$1,800–3,000 in legal fees and S$300–800 for valuation, so around S$3,000 in total before any subsidy. Add roughly 0.75%–1.5% of the outstanding amount if you are still inside your lock-in, and any legal subsidy from your current package that is still within its clawback window.
What is a legal subsidy clawback on a home loan?
It is the condition attached to the legal fee subsidy your bank gave you when you took the package: if you redeem or refinance away inside the clawback window — commonly three years — the subsidy becomes repayable in full. It appears on no rate comparison table and is the most common reason a switch that looks worthwhile is not.
Is there a penalty for refinancing a home loan?
Only if you redeem during your current lock-in period, in which case expect roughly 0.75%–1.5% of the outstanding amount. On S$600,000 that is up to S$9,000. Outside the lock-in there is normally no penalty at all.
Do banks pay the legal fees when you refinance?
Most offer a legal subsidy that covers most or all of the conveyancing cost, sometimes as a cash rebate on completion. It is real money, but it carries a clawback window of typically three years, so treat it as a loan against your next switch rather than as a gift.
Do I need a new valuation to refinance?
Normally yes. The incoming bank needs a current valuation to set the loan-to-value ratio, and it typically costs S$300–800 depending on property type. HDB flats are usually at the lower end and landed property at the higher end.
Can I refinance without paying any fees?
Close to it, if you are outside both your lock-in and your clawback window and the incoming bank's legal subsidy covers the conveyancing. You would still normally pay the valuation. The cheaper route with no fees at all is usually repricing with your existing bank.
Is repricing cheaper than refinancing?
Almost always, because there is no conveyancing and no valuation — usually just a small administrative fee or none. The trade-off is that your own bank rarely offers its best market rate to an existing customer unless you present a competing quote.
How long does it take to recover the cost of refinancing?
Divide the total cost by the monthly saving. On this page's example the S$3,000 cost is recovered in 9 months. If that number lands beyond the end of the new package period, the switch is not paying for itself before the rate resets.
Sources
Every rate on this page was read directly from IRAS on . Stamp duty rules change with little notice — confirm against IRAS before you commit to a purchase.
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