Why Consider Refinancing?
HDB concessionary loans have long provided stability at a fixed interest rate of 2.6%. But with banks offering much lower rates today, many homeowners are finding that refinancing to a bank loan translates into guaranteed savings. By switching, you could immediately reduce your monthly mortgage repayments and free up cash for other financial goals.
The Most Competitive Rates Right Now
Currently, some of the best fixed packages are:
• Maybank 2-year fixed at 1.60%
• DBS 3-year fixed at 1.80%
• DBS 5-year fixed at 1.98%
For those preferring floating rates, OCBC offers 1M SORA + 0.38% (currently about 1.68%) with a 2-year lock-in.
These packages typically require a minimum outstanding loan of $200,000 to $500,000 and are available for both new purchases and refinancing.
How Much Could You Save?
Take a homeowner with an outstanding loan of $500,000 over 20 years:
• At the HDB rate of 2.6%, monthly repayments are around $2,670.
• Refinancing to Maybank’s 2-year fixed at 1.6% lowers this to about $2,420.
That’s a saving of $250 per month, or $6,000 over two years. For larger loans, the savings are even more substantial — a $1 million loan would save about $12,000 over two years.
On top of this, most banks provide subsidies for legal and valuation costs (often covering them fully) for loans above $250,000, which in many cases means the borrower can switch at no additional cost.
The Refinancing Process
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Refinancing from an HDB loan to a bank loan involves a few steps:
Compare Packages: Review fixed and floating rate options to match your financial plans.
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Apply for Approval: Submit your income documents and property details to the chosen bank.
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Legal & Valuation Work: The bank’s appointed law firm and valuer handle the legal paperwork and valuation report.
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Loan Disbursement: The bank pays off your outstanding HDB loan, and your new mortgage begins.
The entire process usually takes around 6–8 weeks, so it’s worth starting early if you’re looking to secure today’s low rates.
Important Considerations
Once you switch to a bank loan, you cannot revert back to an HDB loan. Bank loans also come with lock-in periods and penalties for early redemption. That said, if you are planning to sell your flat in a few years, or if you intend to pay off your mortgage, refinancing provides a way to lock in guaranteed savings over the next couple of years.
How Cashew Can Help
Choosing the right refinancing package can be overwhelming, especially with changing interest rate environments and fine-print conditions. At Cashew, we compare over 500 live mortgage packages across all major banks in Singapore to help you secure the best rate. Our advisors guide you through the entire refinancing journey — from selecting the right package, to handling paperwork, to maximising subsidies — so you save time and money with confidence.
Sarah Chen
