Can You Refinance a Home Loan During the Lock-In Period in Singapore?
Quick answer
Yes, you can refinance a Singapore bank home loan during its lock-in period, but you will pay an early redemption penalty – 1.50% of the amount redeemed on the packages we track – plus any subsidy clawback. On a $1.5M loan that is $22,500 before clawbacks. Switching early pays off only when the rate gap, over the months left in your lock-in, is bigger than those costs.
The question that matters
Will the savings from switching now exceed the cost of leaving early? You only save for the months left in your lock-in – after that you could switch without a penalty anyway.
Today’s numbers
| Item | Figure |
|---|---|
| Early redemption penalty | 1.50% of the amount redeemed |
| Lock-in period | 2-3 years |
| Subsidy clawback period | 3 years |
| Notice required before redemption | 2 months |
| Legal cost (before subsidy) | $2,000-$2,500 |
| Valuation cost (before subsidy) | $500-$1,000 |
| Lowest 2-year fixed rate* | 1.40% |
| 3-month compounded SORA (MAS) | 1.2169% |
*Package rates apply to loans of $1.5M and above, available through Home Loan Whiz as at 21 September 2026. The 1.40% package also requires signing up for priority banking with that bank and placing $200,000 in deposits. SORA: Monetary Authority of Singapore, published 21 September 2026. Rates change monthly.
What does a home loan lock-in actually mean?
A lock-in period is the stretch of time during which redeeming the loan – by refinancing, selling or paying it off – triggers a penalty. On every package we track, that penalty is 1.50%, and it applies to partial repayments too.
Your fixed-rate period and your lock-in period are not necessarily the same thing. Check the dates and conditions in your Letter of Offer.
What could you have to pay if you refinance early?
Early-redemption penalty
1.50% of the amount redeemed on the packages we track – $22,500 on a $1.5M loan.
Legal-subsidy clawback
If your bank subsidised your legal costs when the loan started, you repay that subsidy if you redeem within the clawback period – 3 years on the packages we track.
Valuation or other subsidy clawbacks
Cash rebates and valuation subsidies carry the same 3-year clawback.
New legal and valuation expenses
Moving to another bank costs $2,000-$2,500 in legal fees and $500-$1,000 for valuation, partly offset by the new bank’s subsidy. You pay these whenever you refinance – now or later.
Notice requirements
Redemption needs 2 months’ notice. Check your Letter of Offer well before your intended refinancing date.
Key point
On five of the seven packages we track, the lock-in lasts 2 years but the clawback lasts 3. Clearing your lock-in does not mean you can leave at no cost.
Worked example 1: Could paying a penalty to refinance ever make sense?
A homeowner has $1,500,000 outstanding, 25 years remaining, and is on 1.65% fixed with 12 months left on a 3-year lock-in. They received a $2,800 cash reward at the start, with a 3-year clawback. Another bank offers 1.40% fixed*.
| Stay 12 more months | Refinance now | |
|---|---|---|
| Monthly instalment | $6,105 | $5,929 |
| Interest over the next 12 months | $24,381 | $20,677 |
| Interest saved by switching now | $3,704 | |
| Early redemption penalty (1.50% x $1.5M) | – | $22,500 |
| Cash reward clawback | – | $2,800 |
| Net result of switching now | -$21,596 |
*Illustration using Home Loan Whiz package data as at 21 September 2026, $1,500,000 outstanding, 25 years remaining. Not a client case. Instalments and interest recomputed month by month.
Switching now saves about $310 a month. At that pace it would take about 82 months to recover $25,300 – but the borrower only has 12 months before they could switch penalty-free anyway. Waiting and refinancing when the lock-in ends comes out about $21,600 ahead.
Legal and valuation costs are left out on purpose: you pay them whenever you refinance, so they do not change the answer to “switch now or wait?”
Worked example 2: Out of lock-in, still inside clawback
Same loan, but the 2-year lock-in has ended and the rate has reset to 1-month SORA + 1.00% = 2.2380%*. A $2,500 cash incentive is still inside its 3-year clawback.
| Stay until clawback ends | Refinance now | |
|---|---|---|
| Monthly instalment | $6,533 | $5,929 |
| Interest over the next 12 months | $33,107 | $20,677 |
| Interest saved by switching now | $12,430 | |
| Early redemption penalty | – | None – lock-in has ended |
| Cash incentive clawback | – | $2,500 |
| Net result of switching now | +$9,930 |
*Illustration using Home Loan Whiz package data as at 21 September 2026, $1,500,000 outstanding, 25 years remaining. Not a client case. Instalments and interest recomputed month by month.
Here the clawback is recovered in under 3 months of lower interest, and switching now comes out about $9,900 ahead. The difference between the two examples is the penalty: a 1.50% penalty needs a large rate gap to overcome; a flat clawback of a few thousand dollars does not.
How to calculate your refinancing break-even point
Simplified framework
Switch now if: rate gap x outstanding loan x (months left in lock-in / 12) > penalty + clawback.
On a $1.5M loan with a 1.50% penalty and a $2,800 clawback, the total to beat is $25,300. The rate gap needed:
| Months left in lock-in | Rate gap needed to break even |
|---|---|
| 24 | 0.84 percentage points |
| 18 | 1.12 percentage points |
| 12 | 1.69 percentage points |
| 6 | 3.37 percentage points |
| 3 | 6.75 percentage points |
The fewer months left, the bigger the gap has to be. For comparison, the widest gap across the seven packages we track today is 0.84 percentage points (2.2380% against 1.40%). This simplified test assumes a similar rate is still available when the lock-in ends.
Home Loan Whiz Adviser Insight
Timing matters
Do not only ask, “When does my lock-in expire?” Also ask, “When am I allowed to start the refinancing process?” Mortgage refinancing takes time and packages can change. A good review considers the lock-in expiry, redemption notice requirement, processing timeline and available packages together.
And check your clawback date as well as your lock-in date – on many packages it runs a year longer.
Should I ask my existing bank for repricing first?
Yes. It is useful to know what your existing bank will offer. Repricing costs $500-$800, with no legal or valuation fees and no clawback, though the new package starts a fresh lock-in. Compare three options on the same basis:
-
Continue with your existing package.
-
Reprice with your existing bank.
-
Refinance to another bank.
For the full comparison, read: Repricing vs Refinancing in Singapore: Which Could Save You More?
What about an HDB housing loan?
An HDB housing loan is different from a bank mortgage. HDB states that there is no lock-in period or administrative fee for partial capital repayment of an HDB housing loan. Eligible HDB homeowners may also refinance their HDB housing loan with a financial institution regulated by MAS.
Important consequence
Once an HDB housing loan has been refinanced to a bank loan, you cannot subsequently refinance that mortgage back to an HDB housing loan.
Should I wait until my lock-in expires?
At today’s rates, usually yes – worked example 1 shows why. But start preparing about 3 months before expiry: 2 months’ notice, plus time to compare packages, so the new mortgage takes effect around the right date.
When comparing replacement packages, also see: Fixed Rate vs SORA Home Loan in Singapore: Which Should You Choose?
Frequently Asked Questions
Can a bank stop me from refinancing during lock-in?
Not usually – your Letter of Offer sets the consequences instead: a 1.50% penalty on the packages we track, plus any subsidy clawback.
Does the penalty apply if I only pay down part of the loan?
Yes. The 1.50% penalty applies to partial repayments during lock-in on all seven packages we track. Some allow a limited amount penalty-free – for example, up to 20% of the original loan once a year.
Is the mortgage lock-in the same as the fixed-rate period?
Not necessarily. Check the actual dates and terms in your loan documentation.
What if I am selling the property during lock-in?
Check your package’s sale waiver before assuming the full penalty applies. Among the packages we track, one waives 50% of the penalty on sale and another waives it entirely.
What if my bank’s repricing rate is almost as good?
Once switching costs and clawbacks are included, staying with your bank often comes out ahead. Compare both options on the same basis.
Find out whether waiting is actually cheaper
Send Home Loan Whiz your outstanding mortgage, current interest rate, lock-in expiry date, current bank and your Letter of Offer if available. We’ll compare the cost of switching now versus waiting versus repricing with your existing bank.
WhatsApp Home Loan Whiz – Calculate My Break-Even
Related guides
Sources:
MoneySense – How Home Loans Work
HDB – Payments for HDB Housing Loan
HDB – Refinance Your HDB Housing Loan
MAS – Domestic Interest Rates (compounded SORA)
package rates, fees and terms: packages available through Home Loan Whiz as at 21 September 2026.
Last reviewed: 21 September 2026. Reviewed by Wayne Quek, Founder, Home Loan Whiz.
Reviewed by Wayne Quek, Founder, Home Loan Whiz
Home Loan Whiz helps Singapore homeowners compare mortgage packages across banks, including purchases, refinancing, repricing and more complex financing situations.
