← Back to Ownership Guide
Property / Comparisons
Refinance vs Reprice (Singapore Home Loan, 2026)
Decision comparison · Last updated: February 2026
This is a break-even problem, not a “best rate” problem. Decide with total costs, speed, and how much optionality you need.
The decision in one line
- If your current bank will offer a good rate with minimal hassle: reprice first.
- If you need a meaningful step-down in rate, better package terms, or your bank won’t move: refinance.
Reprice vs refinance: what changes
- Reprice: stay with the same bank; usually faster/cheaper; fewer legal steps.
- Refinance: switch banks; may require legal work/valuation; can unlock better terms.
How to decide (Singapore)
- Compute your “rate gap”: current effective rate vs best market rate.
- Estimate total costs: legal fees, valuation fees, subsidies, clawbacks, and time cost.
- Break-even: if savings recover costs within ~6–18 months, it’s usually worth serious consideration.
Break-even in 60 seconds (a simple math check)
Monthly interest saving ≈ outstanding balance × (rate gap) ÷ 12.
Break-even months ≈ total one-off costs ÷ monthly saving.
Example: $800k balance, 0.60% rate gap → ~$400/month saving. If total costs are ~$2,000, break-even is ~5 months.
Cost checklist (what people forget)
- Legal fees (usually refinance; sometimes waived via subsidies)
- Valuation fee (occasionally required)
- Package subsidies and clawback terms
- Lock-in, early redemption penalties, and notice periods
- Effective rate after promos end (don’t compare teaser vs steady-state)
Decision rules that work in practice
- Try reprice first if your current bank is willing to match within ~0.20–0.40% of market and fees are low.
- Refinance when the rate/terms improvement is meaningful and you’re not likely to exit soon.
- If you may sell/upgrade soon, prioritise optionality (low penalties, low clawbacks) over the absolute lowest headline rate.
Pitfalls that destroy the savings
- Ignoring lock-in and early redemption penalties.
- Missing subsidy clawbacks (if applicable).
- Optimising rate but accepting a structure that increases fragility (e.g., too aggressive floating without buffer).
FAQ
Reprice first or refinance first?
Default: ask your current bank to reprice first. If they won’t move enough, refinance becomes worth the paperwork.
What rate gap is “worth it”?
It depends on loan size and switching costs, but 0.30–0.60% on a large balance can be meaningful quickly.
What if rates are about to drop?
Then avoid long lock-ins unless the discount is large. Prefer packages that keep your exit options open.
What to do next
If you notice something off, tell me what you were trying to decide and your constraints (timeline, risk tolerance, cashflow).
Think of refinancing/repricing as buying a discount with an upfront cost.
Break-even (months) ≈ Upfront costs ÷ Monthly savings
If you will likely switch/sell/fully prepay before break-even, don’t do it.