What are the costs involved in refinancing?
Refinancing costs include legal fees (S$2,000–S$3,000, often subsidised), valuation fees (S$350–S$900, frequently absorbed by the new bank), and early repayment penalties of around 1.5% of the outstanding loan if you refinance within your lock-in period. Outside the lock-in period with a legal subsidy, total out-of-pocket costs can range from zero to a few hundred dollars. Clawback clauses and processing fees are also worth checking before proceeding.
Last updated: 8 May 2026
Legal fees are typically the most significant upfront cost. When you refinance, new mortgage documentation must be prepared by a law firm appointed by the new bank, with fees generally ranging from S$2,000 to S$3,000. The good news is that most banks offer legal subsidies as a refinancing incentive, covering part or all of this cost. For loans of S$300,000 and above, full subsidies are common.
Valuation fees apply when the new bank requires a fresh property assessment to confirm current market value. This typically costs S$350 to S$600 for HDB flats and S$600 to S$900 for private properties, though many banks absorb this as part of their refinancing package.
Early repayment penalties are where the real risk lies. If you refinance during your lock-in period, penalties typically are 1.5% of your outstanding loan amount. On a S$700,000 loan, that is S$10,500, enough to wipe out any interest savings and make the switch financially unviable. This is why most borrowers wait until their lock-in period ends before making a move.
It is also worth checking your existing loan agreement for clawback clauses, which may require you to repay subsidies or incentives received from your current bank if you refinance within a specified window (usually 3 years). Processing fees from the new bank are less common today as banks compete aggressively for refinancing customers, but worth confirming upfront.
When all costs are tallied, a typical refinancing exercise outside the lock-in period - with a legal subsidy from the new bank - can cost anywhere from zero to a few hundred dollars out of pocket. Inside the lock-in period, the penalty alone usually makes refinancing uneconomical.
Cashew's advisors provide a complete cost-benefit analysis for every refinancing recommendation, factoring in all fees, subsidies, penalties, and interest savings so you have full clarity before making any decision.