Let’s be frank — refinancing used to carry a stigma. It sounded like something you only considered when you were drowning in debt and borrowed shoulder pads. But here in 2025? Refinancing your home loan is more like updating your smartphone every three years.
If you’re paying a mortgage in Singapore, you’ve probably heard chatter about refinance home loan rates dropping again. And yes — if you time it right and know the ropes, you could walk away with thousands in savings (plus bragging rights).
This post breaks down the current outlook for refinancing in Singapore, what the new rate landscape looks like, and exactly how you can capitalise — without doing a PhD in finance.
The Current Rate Landscape
What the Numbers Are Saying
As of mid-2025, we’re seeing some pretty compelling numbers in the refinancing space. One analysis notes fixed refinance packages starting from around 1.45 % and floating packages from approximately 1-month SORA + 0.25 %.
Another source lists typical refinancing rate offerings around 1.60 %-1.85 % for fixed 2-3 year locks, and floating options from ~1.65 %.
What this tells us: refinancing in 2025 could be remarkably cheap — especially compared to the heady days of high interest. But the “conditions apply” caveat is very real.
Why the Timing Feels Right
There are a few reasons why refinancing rates are looking sweet right now:
- Monetary Authority of Singapore (MAS) has signalled a slightly easier policy stance amid slowing inflation.
- Wide-scale adoption of SORA (Singapore Overnight Rate Average) as the major benchmark means floating rate packages are more flexible and transparent.
- Banks are actively competing for borrowers post-lock-in-period. Many home-owners are reaching the end of their 2- or 3-year lock-ins — and that means banks will slash spreads to win them over.
In short: The window to catch a good deal is open — but it won’t stay wide forever.
What to Expect When You Refinance
2-Year vs 3-Year Fix: Which Lock-In Suits You?
3-Year Fixed
- Typical rates for the best 3-year fixed refinance deals hover around ~1.65 %-1.85 %.
- Good if you want stability, predictable payments, and fewer surprises.
- Trade-off: Slightly higher starting rate compared to the lowest floating options.
2-Year Fixed
- Super short lock-in (2 years) can give you near-fixed stability but more flexibility to jump later.
- Example: 2-year fixed refinance deals from ~1.55 % to 1.80 %.
- Great for home-owners who expect a move, change or rate drop shortly.
Floating / SORA-Linked Packages
- These are pegged to SORA + spread; current deals suggest floating refinance options from ~1.60 %-1.70 %.
- Ideal if you’re comfortable with market movements and believe rates may head lower.
- Remember: “Floating” doesn’t mean “free of change” — if SORA rises, so could your payments.
How to Capitalise — The Smart Playbook
Step 1: Check Your Lock-In & Penalty
Before you dive in, know your current status:
- Are you still in a lock-in period? Exiting early could cost ~1.5 % of your loan value in penalty.
- How many years are left on your tenure? If you’re already near the end, savings may be smaller.
Once you’re past lock-in (or very close), you’re free to compare and act.
Step 2: Run the Savings Numbers
Here’s the magic formula:
Annual Savings ≈ (Old Rate – New Rate) × Outstanding Loan Amount
So if you have S$1 million outstanding and you drop your rate from 3.5 % to 1.7 %, you’re saving ~S$18,000 a year.
Of course, actual savings will adjust for tenure length, lock-in, and costs. Use online calculators (like those from MoneySmart) to check.
Step 3: Check All Costs
Don’t let fees sabotage your win:
- Valuation & legal fees can run S$2,000-S$3,000. Some banks may rebate them, but don’t assume.
- Partial pre-payment or early exit penalties if you sell or pay off early.
- Spread and rate differential after promo period. Some fixed deals may rise significantly after lock-in.
Step 4: Negotiate Hard
Yes, you’re eligible. Yes, you have leverage.
When you refinance, you’re basically signalling: “Bank, you’re about to lose me unless you give me a better deal.”
Ask banks for:
- Lower spread above SORA
- Cash rebates (S$2,000-S$3,300 typical)
- Waived legal/valuation fees
You’ll be surprised how often they say yes when you show competitors’ offers.
Pro Tips for Refinancers in 2025
Look for Hybrid Deals
If you’re unsure whether rates will dip or rise, consider a hybrid refinance package: e.g., 3-year fixed + floating later, or a floating rate with short lock-in.
This gives you the stability and the upside — a balanced approach.
Time Your Switch
- Start shopping 4-6 months before your current lock-in ends.
- If MAS signals easing or SORA starts trending down, you might want to act early.
- If global inflation spikes or rate hikes loom, lock in a fixed now and refinance again later.
Extend Tenure Wisely
Refinancing isn’t just about rates — it’s also about structure. If you’re refinancing, you might extend your tenure (if allowed) to reduce monthly payments. But remember: Longer tenure = more interest over time. Use with caution.
Real-Life Example
Imagine you bought a resale condo five years ago, your outstanding loan is S$800,000, current rate 3.4 %, and you have 20 years left.
You find a refinance deal at 1.7 % fixed for 3 years.
- Old annual interest: ~S$27,200
- New annual interest: ~S$13,600
- Savings per year: ~S$13,600 — enough to pay off a small car loan, renovate, or crush your extra payments.
After fees (say S$2,500) and lock-in over, you’re still way ahead — often by tens of thousands.
Conclusion
Refinancing in 2025 isn’t an optional “future thing” — it’s a deliberate move for smart homeowners. With current figures showing refinance home loan rates in Singapore at historically competitive levels, the timing might be right for you to act.
Remember: lock-in, calculation, negotiation — repeat every few years. Because in the mortgage game, savings aren’t created by chance. They’re created by choice.
Let’s do this — keep your rates low, your cash flow high, and your coffee budget intact.
