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Refinance Home Loan in Singapore: A Complete Guide | TLC

Refinance Home Loan in Singapore

Refinancing your home loan in Singapore can be a strategic move to enhance your financial stability and achieve better loan terms. This guide provides comprehensive insights into how to refinance home loan options, helping you make informed decisions that align with your financial goals.

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What Is a Refinance Home Loan?

A refinance home loan means replacing your current mortgage with a new one, usually from a different lender, to secure better financial terms. This could include lower interest rates, reduced monthly payments, or more flexible repayment options.

Key Point: Unlike simply modifying the terms of your existing loan, a refinance home loan involves taking out a new loan to pay off the old one, thus starting a fresh loan agreement. This process can help you align your mortgage with your current financial situation, offering potential savings and more manageable payments over the loan's duration.

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Why Should You Refinance Home Loan?

Refinancing your home loan offers a range of benefits that can significantly improve your financial situation. Here are some key advantages to consider:

Adjust Loan Tenure

Change the duration of your home loan to suit your financial needs. Extend the tenure to reduce monthly payments or shorten it to pay off your loan faster and save on interest.

Lower Monthly Repayments

Secure a lower interest rate or extend your loan tenure to reduce your monthly financial burden. Free up cash for other expenses or investments.

Use Your Home Equity

Tap into the equity of your property to access funds for home renovations, education expenses, or other large purchases at more favorable interest rates.

When Should You Refinance Home Loan?

Refinancing your home loan can be beneficial under certain circumstances. Here are key scenarios when you should consider a refinance:

  • Lower Interest Rates Available: If current interest rates are significantly lower than your existing mortgage rate, refinancing can result in substantial long-term savings on interest payments.
  • Shorten Loan Term: If you're in a better financial position and can afford higher monthly payments, refinancing to a shorter loan tenure helps you pay off your mortgage faster.
  • Improved Financial Profile: An improved credit score, increased income, or higher home value can make refinancing more advantageous, leading to better loan terms and approval rates.

When Should You Not Refinance Home Loan?

Refinancing isn't always the best decision. Here are circumstances where you might want to reconsider:

Costs Outweigh Savings

Standard fees include legal and valuation fees, with potential additional costs like subsidy clawbacks or cancellation fees. Always analyze whether the potential savings will outweigh these costs.

Planning to Sell Soon

Refinancing places your home loan into a new lock-in period, during which banks charge a 1.5% penalty fee if the loan is fully redeemed. Consider your estimated sale or redemption date carefully.

Current Rate Is Better

Though rare, sometimes your floating interest rate after your lock-in period ends is lower than the current market rate. In this case, refinancing offers no advantage.

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What Should You Do to Apply for a Refinance Home Loan?

Applying for a refinance home loan involves several crucial steps to ensure a smooth and beneficial transition:

  1. Know Your Current Home Loan

    Review your loan agreement to understand the current interest rate, loan tenure, outstanding balance, and any lock-in periods or early repayment penalties.

  2. Compare the Best Home Loan for Refinancing

    Research and compare various refinance packages offered by different banks. Look for better interest rates, favorable terms, and additional benefits.

  3. Speak to a Mortgage Broker

    Consult with a mortgage broker who can provide expert advice tailored to your needs. They can help you understand the process and guide you through the application.

  4. Review Legal Subsidies

    Some banks offer subsidies to cover legal and valuation fees. A mortgage broker can advise which bank will be most competitive for your loan quantum.

  5. Submit Your Application

    Once you've chosen the best option and prepared all necessary documents, submit your application. Approval typically takes 1 to 10 working days depending on complexity.

  6. Engage an Approved Law Firm

    After accepting the bank's offer, engage a law firm from the bank's panel to handle the conveyancing and ensure a smooth process.

What Our Customers Say

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

Start Your Refinance Home Loan with TLC

Starting your refinance home loan journey with The Loan Connection is simple and straightforward. Here's how you can get started:

Contact Us

Reach out through our website or call us directly. Our friendly staff will assist you with any initial queries and set up a consultation.

Schedule a Consultation

Meet with our experienced mortgage advisors to review your current loan and receive personalized advice tailored to your needs.

Compare Options

We'll help you compare various packages from different banks to find the best terms and interest rates for your situation.

Prepare Documentation

We'll guide you through gathering necessary documents including NRIC, income statements, CPF statements, and existing loan details.

Engage a Lawyer

We can recommend reputable conveyancing lawyers on the bank's panel to handle the legal paperwork efficiently.

Finalise the Process

Once approved, we'll help you complete the refinancing process, ensuring a smooth transition to your new loan package.

Why Choose Us for Your Singapore Refinance Home Loan?

Choosing The Loan Connection means partnering with a trusted, experienced team committed to your financial success:

Simple, Fast, Convenient

Our streamlined process is designed to save you time and effort, making your refinance journey as straightforward as possible. From initial consultation to finalizing your loan, we handle all details efficiently.

Less Hassle – We Do All the Work

We do all the comparison and information gathering for you. Our team analyzes various home loan packages from different banks, comparing interest rates and terms to find the best options for your needs.

Unbiased Advice

We provide unbiased advice tailored to your unique situation. Our advisors are committed to helping you make the best financial decisions without influence from specific banks or institutions.

Strict Selection Criteria

We adhere to strict selection criteria for our mortgage bankers, ensuring you receive the highest quality service from professionals committed to your best interests.

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Refinance your existing HDB or private property loan and reduce the monthly payments

Frequently Asked Questions About Home Loan Refinancing in Singapore

A good time to refinance your home loan in Singapore is when interest rates are significantly lower than your current rate, your credit score has improved, your income has increased, or your property's value has appreciated. Additionally, refinancing can be beneficial if your current mortgage has unfavourable terms or if you want to switch from an adjustable-rate mortgage to a fixed-rate mortgage for more stability.

Repricing involves adjusting the interest rate of your existing home loan with the same bank, typically to a lower rate, without taking out a new loan. Refinancing, on the other hand, involves switching your existing mortgage to a new loan, often with a different lender, to secure better terms such as lower interest rates, longer tenure, or different repayment structures.

Paying off your bank mortgage loan early can save you interest payments in the long run, but it depends on your financial situation. Consider factors such as early repayment penalties, your overall financial goals, and whether you have other high-interest debts that should be prioritised.

To qualify for a refinance home loan package in Singapore, your credit score should ideally be no worse than a BB rating. This level of credit score indicates to lenders that you are a reliable borrower. A higher credit score also increases your chances of loan approval

The Loan-to-Value (LTV) ratio affects eligibility by determining the maximum amount you can borrow relative to your property's value. In Singapore, the LTV ratio for refinancing a home loan is typically up to 75%-80% of the property's value. A lower LTV ratio indicates less risk for the lender and can improve your chances of approval.

Yes, self-employed individuals can qualify for a refinance home loan package. Banks will typically request for their latest NOA and 12 months CPF contribution to assess their loan repayment ability. 

The refinancing process usually takes about one week from application to loan approval. The exact duration depends on factors such as the lender's processing time, the completeness of your documentation, and the complexity of your financial situation.

Potential fees involved in refinancing a home loan include legal fees and valuation fees.There may also be additional cost involved such as subsidy clawback, speak with a mortgage broker to find out more.

Yes, you can refinance your home loan even if you have an existing outstanding personal loan. However, lenders will consider your total debt obligations, including the personal loan, when assessing your refinancing application. Ensuring your Total Debt Servicing Ratio (TDSR) is within the allowable limit is crucial.

When choosing between a fixed interest rate and a floating interest rate, consider factors such as your risk tolerance, financial stability, and market conditions. Fixed rates offer stability with predictable payments, while floating rates can be lower initially but may vary with market fluctuations.

Yes, some lenders may impose penalties or fees for early repayment after refinancing, especially if it occurs within a lock-in period. These penalties are meant to compensate the lender for the interest income lost due to the early payoff.

Yes, you can refinance your home loan if you have previously been bankrupt or faced financial difficulties, but typically, there is a waiting period of five to seven years after receiving your official discharge letter before you can apply for a new home loan. Banks have specific eligibility criteria that consider factors such as your income, age, and loan-to-value ratio. It is advisable to consult with a mortgage advisor to understand the requirements and improve your chances of loan approval.

If the valuation of your property decreases during the refinancing process, it may affect the Loan-to-Value (LTV) ratio, potentially reducing the amount you can borrow. In such cases, you may need to provide additional collateral or make up the difference with cash to proceed with the refinancing.

Yes, there are subsidies available to refinance home loans in Singapore. For HDB properties, if your outstanding mortgage is more than $300,000, many banks offer full subsidies to cover the refinancing fees. For private properties, banks often provide cash subsidies to offset the refinancing costs if your remaining loan balance exceeds $500,000.

It’s important to note that these subsidies usually have a clawback period of 3 years. If you switch banks or pay off the loan within this period, you may need to repay the subsidies in full. There are exceptions where you might avoid the clawback penalty, but these are uncommon and require careful consideration.