By FMTeam You’ve probably noticed that every dinner conversation lately includes at least one person complaining about mortgage rates in Singapore.
And for good reason — after years of climbing interest rates and Fed drama, the market’s finally at a tipping point. Rates aren’t rock-bottom anymore, but they’re also not sky-high. So naturally, everyone’s asking the same question: Is now the time to refinance?
The truth? There’s no universal answer. But there is a smart way to decide.
Let’s break down how mortgage rates really move, how refinancing plays into it, and how to know if switching your loan today could save you thousands — or just give you a headache.
Step 1: Get to Know the Singapore Mortgage Landscape
From SIBOR to SORA — The New Normal
If you still think in SIBOR, it’s time to move on. Singapore’s moved to SORA (Singapore Overnight Rate Average) — a transparent, data-based benchmark that reflects actual interbank lending rates.
As of 2025, floating SORA-linked packages hover between 2.8% and 3.3%, depending on the bank’s spread and your loan size. Fixed-rate packages tend to sit around 3.4%–3.6%, giving you predictability for a couple of years.
In other words: rates are stabilising, but they’re still high enough that switching to a smarter deal can make sense.
Why It Matters for Refinancing
Your bank wants you to forget your lock-in is expiring. Because once it does, your loan quietly reverts to a higher “board rate” — often 0.5–1.0% higher than the market average.
That’s free money for the bank, and a sneaky expense for you.
Refinancing means stepping back in, comparing mortgage rates in Singapore, and forcing your loan to start working for you again.
Step 2: Spot the Right Time to Refinance
Rule of Thumb #1: Watch the Rate Gap
If your current rate is more than 0.3% higher than what’s on offer, it’s time to run the numbers.
Example:
- Current loan: $800,000
- Existing rate: 3.5%
- New refinance rate: 3.0%.
That 0.5% difference equals $4,000 in annual savings. Even after legal and valuation fees (~$2,500), you’re in the green within seven months.
Rule of Thumb #2: Use the Lock-In Countdown
Banks usually lock you in for 2–3 years. Breaking early means paying around 1.5% of your outstanding loan as penalty — not fun.
But once that lock-in ends, refinancing is practically a free pass. That’s your moment to pounce.
Pro tip: Start comparing new packages 3–6 months before your lock-in expires. That’s when banks start dangling promos to secure you early.
Step 3: Understand Fixed vs Floating — and Pick Wisely
Fixed Rates — Predictability with a Premium
Fixed-rate loans give you peace of mind: your monthly instalment won’t change, no matter what happens in the economy.
Perfect if:
- You hate volatility.
- You’re planning your finances long-term.
- You suspect rates might rise again soon.
The trade-off? Fixed rates are usually 0.2–0.3% higher than floating packages. But that’s the price of sleeping well.
Floating Rates — Risky, but Rewarding
Floating loans are pegged to SORA + bank spread, which changes every month or quarter.
If SORA dips (as it might later in 2025), you save money automatically. But if inflation kicks back in, your payments rise too.
Pro tip: Choose a floating loan with a shorter reset period (like 1-month SORA) if you want flexibility, or a longer one (like 3-month SORA) if you prefer stability.
Step 4: Don’t Just Look at the Rate — Look at the Fine Print
Watch the Hidden Costs
When comparing mortgage rates in Singapore, don’t just chase the lowest headline number. Look out for:
- Legal and valuation fees: Usually $2,000–$3,000, though many banks offer rebates.
- Repricing options: Can you switch within the same bank later?
- Partial repayment penalties: Some banks still charge for early top-ups.
- Lock-in periods: 2–3 years is standard; longer ones limit flexibility.
A rate that looks amazing upfront can end up costing more long-term if the terms are rigid.
Calculate Your Real Savings
A quick hack:
(Old Rate – New Rate) × Loan Amount = Yearly Savings
If that number minus fees is positive within a year, refinancing is worth doing.
Otherwise, park it and review again in six months — markets move fast.
Step 5: Negotiate Like You Mean It
Use Competition as Leverage
Banks know you have options — especially if your credit score and income are solid.
When a banker says, “This is the best we can offer,” smile and reply:
“I’ve been quoted SORA + 0.45% elsewhere. Can you match or beat that?”
You’ll be amazed how quickly “final” becomes “let me check with my manager.”
Call in a Mortgage Broker
A mortgage broker can take that negotiation even further. They work with multiple banks, know which ones are desperate to hit sales targets, and can often get you unpublished rates.
And since they’re paid by the banks (not you), their service doesn’t cost a cent.
Think of it as having a finance-savvy friend with insider access — except they handle your paperwork too.
Step 6: Time It with Market Signals
Follow the Fed — and MAS
When the US Federal Reserve hints at rate cuts, SORA tends to follow suit in a few months. The Monetary Authority of Singapore (MAS) adjusts liquidity conditions accordingly.
That’s when banks start offering fresh promotional refinance packages.
Timing your move just before or during this phase can lock in major savings before rates tick back up.
Avoid the Herd Effect
When everyone starts refinancing at once, banks quietly raise spreads again.
So if you’re reading about “historically low rates” in the news, you’re already late to the party.
Stay ahead by comparing early — ideally before MAS makes any big policy announcements.
Step 7: Treat Refinancing as Routine
Review Every 2–3 Years
Mortgage rates move. Life changes. What worked in 2022 might be costing you in 2025.
Set a calendar reminder every 30 months to review your loan. Even if you don’t switch banks, you can reprice within your existing one to lower your rate.
Think Long-Term
Refinancing isn’t about chasing the absolute lowest rate. It’s about long-term efficiency — keeping your interest costs lean and your loan flexible enough to adapt as you grow.
Conclusion
The Smart Homeowner’s Advantage
You don’t need to predict the economy to win the mortgage game. You just need to understand how mortgage rates in Singapore work — and play your timing right.
Refinance when:
- Your lock-in’s up
- Your rate is uncompetitive
- The market’s entering a rate dip
Negotiate, compare, and get a mortgage broker to do the heavy lifting.
Because in the end, the goal isn’t to outsmart the banks — it’s to stop paying them more than you have to.
And that, my friend, is how you play the long game like a pro.