TLC-logo-black
Guide on How to Refinance HDB Loan in Singapore | TLC

Guide on How to Refinance HDB Loan in Singapore

Refinancing your HDB loan can be a strategic move to manage your finances more effectively. Whether you aim to lower your interest rates, reduce monthly repayments, or switch to a more favourable loan package, understanding the HDB home loan refinancing process is crucial.

Get Mortgage Rates
HDB Housing in Singapore

What Is HDB Loan Refinancing?

HDB loan refinancing is the process of replacing your existing HDB loan with a new one, typically to take advantage of better interest rates or loan terms offered by another bank or financial institution. By refinancing, you can switch from an HDB concessionary loan to a bank loan or between different bank loan packages.

This process can lead to significant savings over time by reducing the interest you pay or by adjusting your loan tenure to better suit your financial situation. Grasping the specifics of HDB home loan refinancing can help you determine if this option aligns with your financial goals and needs.

Ready to Save on Your HDB Loan?

Get Latest Rate

Why Go for an HDB Refinance Loan with TLC?

Refinancing your HDB loan with The Loan Connection (TLC) offers numerous benefits designed to suit your financial needs and goals.

Unbiased Advice

We provide unbiased advice on refinancing your HDB loan. Every individual has unique circumstances, and we assess your case holistically, considering factors such as planning for future needs and managing your current loan structure.

Our Service is Free!

We do not charge clients any consultation fees, as the banks pay us a small fee for referring clients to them. All banks pay us the same amount, ensuring our advice is always neutral and unbiased.

Adapt to Financial Circumstances

Refinancing with TLC allows you to adapt your HDB loan to better fit your current financial situation, whether your income has increased or decreased, or you have other financial commitments.

Lower Interest Rate

One of the primary reasons to refinance is to take advantage of lower interest rates, reducing your monthly payments and overall interest costs over the loan's lifespan.

Flexible Loan Terms

TLC offers advice on flexible loan terms from various banks that can be customised to meet your financial needs, whether you want to extend or shorten your loan tenure.

Bank Incentives and Perks

Banks provide subsidies to help with the cost of refinancing.

Debt Consolidation Advice

Debt consolidation involves combining multiple unsecured debts into a single loan, simplifying your financial management by reducing the number of monthly payments. You can consolidate debts such as personal loans and credit card balances into one loan. This typically results in a lower overall interest rate, making it easier to manage your finances and potentially reducing your total repayment amount.

When You Should Not Go for HDB Bank Loan Refinancing

Refinancing your HDB loan can offer many benefits, but it's not always the best choice for everyone. Here are some situations where you might want to reconsider:

Mortgage Interest Offered by HDB Loan Is Lower Than Bank Loan

If the interest rate being offered by the HDB loan (currently 2.6% p.a) is lower than what the bank loans can offer, it will not be ideal to refinance your HDB loan to a bank loan. Refinancing your HDB loan in this case will put you at a disadvantage.

Cost Involved Outweighs Interest Savings

Consider the cost-to-savings difference before deciding to refinance your HDB loan. Refinancing might lower your monthly payments and even save you interest, but there are costs associated with refinancing, such as legal fees, valuation fees, potential subsidy clawbacks, or penalty fees. Ensure that you still have net savings after expenses before refinancing.

Prefers Stability

While a bank loan has the potential to outperform an HDB loan in the long run, it is very much dependent on market conditions. There will be times when bank loan rates are lower than HDB loan rates, but there will also be times when bank loan rates are higher. This volatility is not for everyone. Knowing the timeframe to plan for will also be crucial in determining which option best suits your requirements.

Who Is Eligible for HDB Home Loan Refinancing?

To be eligible for HDB home loan refinancing, several criteria must be met:

  • Loan Meets the Bank's Minimum Requirement: Your existing loan must meet the minimum refinancing amount set by the bank. Each bank has different requirements, so it's essential to check with your lender.
  • Loan Tenure Satisfies Requirement: The tenure of your loan must fit within the bank's acceptable range. Banks have specific guidelines regarding the remaining loan tenure that qualifies for refinancing.
  • Substantial Remaining Lease: The property should have a substantial remaining lease. Banks generally require the lease on your HDB flat to have a significant number of years remaining after loan maturity (typically 30 years for most banks).
  • Mortgage Servicing Ratio (MSR): The MSR restricts the amount of your gross monthly income that can be used for property loan repayments to 30%. Meeting this ratio is necessary to qualify for HDB bank loan refinance.
  • Total Debt Servicing Ratio (TDSR): The TDSR limits the proportion of your gross monthly income allocated to servicing all your debt obligations, including property loans, to 55%.
  • Loan-To-Value (LTV): The LTV ratio determines the maximum amount you can borrow relative to the value of your property. For HDB refinance loans, the LTV ratio typically should not exceed 80% of the property's value.
Check Your Eligibility

How to Refinance Your HDB Loan: Step-by-Step Process

Following these steps will help you efficiently navigate the HDB refinance loan process and secure a refinancing package that meets your needs.

  1. Understand Current Loan Condition

    Review your existing loan terms, interest rates, and remaining tenure. Understanding your current situation is crucial for making informed decisions about refinancing options.

  2. Explore Refinancing Options from Various Singapore Banks

    Compare the refinancing packages offered by different banks. Look for better interest rates and favourable loan terms that suit your financial situation to find the best deal.

  3. Gather the Necessary Documentation

    Prepare essential documents such as your NRIC, income statements, CPF statements, and details of your existing loan. Ensure all paperwork is up-to-date and accurate to avoid delays.

  4. Begin Your Application for Refinancing Your HDB Loan

    Submit your application along with the necessary documents to the chosen bank. Follow up with the bank regularly to track the progress of your application and address any issues promptly.

  5. Engage the Right Lawyer for Necessary Paperwork

    Choose a reputable conveyancing lawyer who is on the panel of banks you are considering. Ensure they are responsive and can handle the legal aspects of refinancing, ensuring all documents are correctly processed.

  6. Adjust Your CPF Contributions

    Review and adjust your CPF contributions if necessary to align with the new loan terms. Ensure that your CPF account has sufficient funds to cover the new loan arrangements, maintaining financial stability.

  7. Finalize the Process

    Once approved, complete the refinancing process and transition smoothly to your new loan package. Your lawyer will handle the final documentation and fund transfer.

How Long Does HDB Home Loan Refinancing Take?

The timeframe for completing the HDB home loan refinancing process takes approximately 2.5 months. The exact duration depends largely on the borrower's choice of bank and the specific loan package selected. Despite the perceived complexity of the refinancing process, your chosen law firm will manage the intricate details. The potential savings from switching from an HDB loan to a bank loan make the wait worthwhile, ensuring financial benefits in the long run.

Compare Best Refinancing Packages from Top Banks

Compare Now

HDB Bank Loan Refinance Tips

When considering refinancing your HDB loan, keep these 8 tips in mind to make an informed decision:

1. Take Fees Into Account: Be aware of costs such as legal and valuation fees. If you are refinancing from another bank, there may be subsidy clawback and penalty fees which you may be unaware of as well. An experienced mortgage broker will be able to advise in detail.
2. Check for Lock-In Periods or Early Repayment Penalties: The earliest you can start the refinancing application process will be six months before your lock-in ends. During an interest rate uptrend, it may be beneficial to lock-in the current market rate earlier. While during an interest rate downtrend, it may be beneficial to delay (to a certain extent) for rates to drop further. Typically the sweet spot will be 2.5 months (2 weeks for processing + 2 months notice to current bank) before your lock-in ends.
3. Assess the Interest Rate: Compare the interest rate offered by the new bank loan with your current HDB loan rate to ensure you are getting a better deal.
4. Consider Loan Tenure and Monthly Repayment Amount: Evaluate the loan tenure and monthly repayment amounts to ensure they fit within your budget and long-term financial plans.
5. Compare Various Banks and Their Refinancing Packages: Don't settle for the first offer you receive. Compare refinancing packages from multiple banks to find the most advantageous terms.
6. Select a Law Firm Within the Bank's Panel: Choose a reputable law firm that is on the panel of the bank you are refinancing with, as this can streamline the legal process.
7. Read the Terms and Conditions Carefully: Thoroughly read and understand the terms and conditions of the loan agreement before signing to avoid any surprises later on.
8. Understand the Financial Impact: Clearly understand how refinancing your HDB loan will impact your financial situation, including potential savings and costs.

Why Choose The Loan Connection

Choosing The Loan Connection for your HDB loan refinancing means partnering with a trusted, experienced team committed to your financial success.

Lifetime Service

We offer lifetime service to our clients, ensuring continuous support and guidance throughout your mortgage journey. Whether you need advice on your current HDB loan or future refinancing options, our team is always here to help.

Guaranteed Low Rates

We are dedicated to securing the best possible rates for our clients. Our extensive network of banking partners allows us to offer guaranteed low rates, helping you save money and reduce your monthly payments.

Experienced Team

Our team of mortgage advisors brings years of experience and expertise to the table. We understand the intricacies of the mortgage market and are equipped to provide you with the most accurate and beneficial advice for your refinancing needs.

Strict Selection Criteria

At The Loan Connection, we adhere to strict selection criteria for our mortgage bankers. This ensures you receive the highest quality service and advice from professionals committed to your best interests.

What Our Customers Say

Read testimonials from satisfied clients who have successfully refinanced their home loans with us.

Get Started with Us

Starting your HDB loan refinancing journey with The Loan Connection is simple and straightforward. Follow these steps to begin:

  1. Contact Us

    Reach out to our team through our website or call us directly to express your interest in refinancing your HDB loan.

  2. Consultation

    Schedule a consultation with one of our experienced mortgage advisors. We will review your current loan details and financial situation to provide personalised advice.

  3. Compare Options

    Our advisors will help you compare various refinancing packages from different banks, ensuring you find the best deal that suits your needs.

  4. Prepare Documentation

    Gather the necessary documents, including your NRIC, income statements, CPF statements, and current loan details. Our team will guide you through this process.

  5. Engage a Lawyer

    We can recommend reputable conveyancing lawyers to handle the legal paperwork required for refinancing.

  6. Submit Your Application

    With our assistance, submit your complete application to your chosen bank. We'll help ensure all documentation is in order.

  7. Finalize the Process

    Once approved, we will help you finalize the refinancing process, ensuring a smooth transition to your new loan package.

By partnering with us, you can navigate the HDB loan refinancing process with ease and confidence, securing the best terms and rates available.

Compare Best Refinancing Packages from Top Banks

Compare Now

Frequently Asked Questions About HDB Home Loan Refinancing

To refinance your home loan in Singapore, start by assessing your current HDB loan’s terms, outstanding amount, interest rate, and tenure. Speak to us and we will help compare refinancing packages from various banks to find the best rates and terms. Prepare necessary documents, such as your NRIC, income statements, CPF statements, and loan details. Submit your application to the chosen bank and adjust CPF monthly instalment amount if required. Engage a conveyancing lawyer from the bank’s panel to handle the legal paperwork

The lock-in period is a specified duration during which you cannot refinance or repay your home loan in full without incurring a penalty. It typically lasts 1 to 3 years and is designed to ensure that the lender recoups some of the costs of issuing the loan. Before refinancing, check if your current HDB loan has a lock-in period to avoid any unexpected penalties.

HDB Home loan refinancing involves 2 main costs which are legal fees (payable to law firm) and valuation fees (payable to bank). If you are refinancing from a bank, there may be additional cost involved such as subsidy clawback or penalty fee.

Refinancing can be worth it if it results in significant savings or better loan terms. Benefits include lower interest rates, reduced monthly payments, or useful features such as waiver of penalty in the event of sale. However, it’s important to consider the costs involved, such as legal and valuation fees, and calculate the break-even period to ensure the savings justify the expenses.

There is no strict limit on how often you can refinance your HDB home loan as long as your home loan is out of lock-in / commitment period. However, it’s essential to consider the costs and potential savings each time you do a refinancing. Also do take note that once you refinance from a HDB loan to a bank loan, you will not be able to revert back to a HDB loan for this property.

Yes, legal fees for refinancing your HDB loan can be paid using your CPF Ordinary Account (OA) funds. This helps reduce the out-of-pocket expenses associated with the refinancing process. Ensure you have sufficient funds in your CPF OA to cover these fees.

When deciding to refinance your HDB loan, consider the new interest rates compared to your current rate, how the new loan tenure will affect your monthly payments and total interest, the costs involved (such as legal and valuation fees), any penalties for early repayment of your current loan, and the overall financial impact on your situation and long-term goals.

Refinancing from a HDB loan to a bank loan is not advisable when the interest rates provided by the bank are higher, when the cost involved outweigh the potential savings, or if you prefer the stability of a HDB loan. Our HDB concessionary loan is currently pegged to be 0.10% higher than our CPF Ordinary Account's Interest rate (currently 2.50%).

If you refinance your HDB loan, your Home Protection Scheme (HPS) cover will need to be adjusted to reflect the new loan details. The bank will inform the Central Provident Fund (CPF) Board about the refinancing, and they will update your HPS coverage accordingly. It’s essential to ensure continuous protection for your home loan under the HPS.