Refinance Your Mortgage

Refinancing is when you move from your mortgage from your current bank, to another bank. This is typically done to secure better interest rates, loan tenure and terms.

Banks in Singapore typically give new to bank rates as well as a cash gift to cover most if not all of the moving costs associated with switching banks such as legal and valuation fees. 

You should look at refinancing 3-4 months before your loan expires, especially when you are not subjected to any penalties.

By refinancing, you'd be able to get promotional rates across all banks, which are usually better than repricing rates. Promotions also include cash benefit that can offset your legal and valuation fees. 

if your repricing rates are bad, consider refinancing if it's more profitable.

Do consider your terms, especially if you are considering the sale of your property.
Call us for a free, non-obligatory review for your mortgage

the major costs of refinancing would be the legal and valuation fees. 
Most banks would cover all if not most of all costs with their cashback promotions.

Cashback usually ranging from $2000 - 2800

for properties below 3mill,
Legal fees are about $1800 (payable via CPF)
and valuation fees are about $400

You should be repricing when you're locked into your current bank.

When refinancing, you'd have promotions that pay for your legal and valuation fees, these are subject to a clawback period of 3 years. which means, if you're locked in, you should be repricing with the current bank once, before consider refinancing again.

However, if the banks offer really bad repricing rates, it may be profitable for you to pay the penalty and move to a different bank instead. 

Everyone has relatively different considerations, call us for a free, non-obligatory review

A mortgage advisor is a professional that helps you get a home loan and refinance your mortgages. 

A good mortgage advisor

have a deep understanding of bank and government regulations, to help you avoid fees by understanding when you are looking to sell your property. Advises you on what rates and terms are favorable in the current market environment based on your current constraints.

Engaging a mortgage advisor saves you time and money.

In Singapore, the mortgage advisors are renumerated by referral fees to the bank as a third party. Banks either pay the bankers or mortgage brokers for a successful case. 

Difference is, a mortgage broker has access to all the banks in Singapore and does not take a salary from the bank; being able to recommend the rates that are most beneficial to you.

Bankers are renumerated by the profit the banks make, whereas the mortgage broker gets a flat fee, which means the priority is the lowest rate.

Decoupling is the legal process where you remove one of the owners from the ownership of the property. 

While refinancing, you can consider decoupling to take advantage of the legal and valuation fee subsidies to decouple your property. 

Decoupling typically cost upwards of $5500 for the lawfirm plus the stamp duty and other taxes(if any) to decouple

Also commonly known as gearing up or taking up an equity term loan, We can increase our loan size if our property has appreciated or if the loan has been paid down. 

This is a great strategy to take profits, without incurring the expensive transactional fees associated with the property transactions 

Here's the equation of how much you can borrow.

75% Property valuation 
-(minus) outstanding loan 
-(minus) cpf used
= Max Increase In Loan

If it's a positive number, you may increase your loan size, else, we'll have to wait. 

If interest rates are higher than the CPF Rates it might be worth entertaining that thought.

Especially if you're close to 55 years old.

After 55 year old your CPF becomes a megabank. You'll be able to withdraw your CPF to make a voluntary housing refund, this is exceptionally useful when gearing up for portfolio allocation

According to MAS,

domestic interest rates can be at a discount (premium) to global interest rates when the S$ is expected to appreciate (depreciate) against other currencies.

A small country like Singapore, we are very clearly price takers. And there has been a 90+% correlation between SORA and EFFR based on our 18 year data study from 2005-2023

It helps that the US Federal Reserve release economic projections

Do keep in mind, that the economic projection is the current plan and plans do change.