Simulated case study: a hypothetical scenario to illustrate the rules. Not a real client or transaction. Figures as at 10 October 2026.
Under the assumptions below, a couple with S$900,000 left on their home loan would pay about S$52,400 in interest over the next 24 months if their rate rolled up to an assumed 3.00%. Repricing to an assumed 2.20% fixed rate brings that to about S$38,300. Refinancing to a floating rate at 3M SORA (1.23% on 8 Oct 2026) plus an assumed 0.70% brings it to about S$36,600, including an assumed S$3,000 switching cost. The ranking changes if SORA rises.
The situation
Mei (42) and Jun (44) own the private condo they live in. Their fixed-rate period is ending, and their bank has written to say the loan will move to its standard "thereafter" rate unless they choose a new package. They want to know whether to do nothing, reprice with their current bank, or refinance to another bank.
All rates below are assumptions for illustration, not quotes from any bank.
The rules that apply
| Rule | What it says | Source | Effective |
|---|---|---|---|
| TDSR on refinancing (owner-occupied) | Owner-occupiers refinancing their housing loan are exempt from the TDSR threshold | MAS: Who TDSR applies to | Loans applied from 29 Jun 2013 |
| TDSR on refinancing (investment property) | Can exceed the threshold only with a debt-reduction plan (at least 3% of the balance over up to 3 years) and the bank's credit approval | Same MAS page | Same |
| Benchmark rate | 3M compounded SORA published daily by MAS: 1.23% on 8 Oct 2026 | MAS: SORA | As at 8 Oct 2026 |
| Lock-in, notice, penalties, subsidy clawback | Set by each bank's facility letter, not by regulation | Your facility letter | Check yours |
The numbers
Assumptions
| Item | Assumption |
|---|---|
| Outstanding loan | S$900,000 |
| Remaining tenure | 23 years (276 months) |
| Option A: do nothing | Loan moves to an assumed "thereafter" rate of 3.00% |
| Option B: reprice with current bank | Assumed 2-year fixed rate of 2.20%, no fee |
| Option C: refinance, floating | 3M SORA 1.23% + assumed spread 0.70% = 1.93%, assumed S$3,000 legal and valuation cost, no subsidy |
| Option D: refinance, fixed | Assumed 2-year fixed rate of 2.10%, assumed S$3,000 cost |
| SORA path for Option C | Unchanged for 24 months (sensitivity below) |
Step-by-step
Monthly instalment = L x r / (1 - (1 + r)^-n), where L = S$900,000, n = 276 and r = annual rate / 12. Interest for each month = balance x r, summed over 24 months.
| Option | Rate | Monthly instalment | Interest over 24 months | Switching cost | 24-month cost |
|---|---|---|---|---|---|
| A. Do nothing | 3.00% | S$4,518 | S$52,406 | S$0 | S$52,406 |
| B. Reprice | 2.20% | S$4,158 | S$38,314 | S$0 | S$38,314 |
| C. Refinance, floating | 1.93% | S$4,041 | S$33,575 | S$3,000 | S$36,575 |
| D. Refinance, fixed | 2.10% | S$4,114 | S$36,558 | S$3,000 | S$39,558 |
Under these assumptions, Option C costs about S$15,800 less than doing nothing over 24 months, and about S$1,700 less than repricing (Option B).
What changes the answer
- SORA rises. If SORA is 1 percentage point higher (2.93% all-in) from month 13, Option C's 24-month interest rises to about S$42,200, or S$45,200 with the switching cost. That is more than repricing at a fixed 2.20% (S$38,300). A fixed rate trades some expected saving for certainty.
- Switching costs and subsidies. If the new bank pays legal and valuation fees, Option C's cost falls by up to S$3,000. Many subsidies must be repaid if you refinance again within a set period, so check the clawback clause.
- Lock-in and notice. If any part of the current loan is still in a lock-in period, a prepayment penalty can outweigh the savings. Some banks also need written notice (often several months) before you redeem.
What to check for your own situation
- Your facility letter: lock-in end date, notice period for redemption, prepayment penalty and any subsidy clawback.
- Your bank: its repricing offers in writing, including any admin fee and the "thereafter" rate.
- Other banks: the package rate, how the floating rate is defined (which SORA tenor, plus what spread), any legal or valuation subsidy and its clawback period.
- Owner-occupied or investment: owner-occupiers are exempt from the TDSR threshold when refinancing; investment property loans have extra conditions (MAS).
- HDB loan? If you currently have an HDB loan, HDB does not allow you to switch back to an HDB loan after moving to a bank loan.
- Run your own numbers: use our borrowing calculator.
Related reading
- How SORA sets your home loan cost
- Home loan refinancing in Singapore
- TDSR pledge vs show funds: how MAS counts assets
This is a simulated illustration with assumed rates, not a quote or financial advice. Check current rates and terms with banks directly.
Frequently asked questions
What is the difference between repricing and refinancing?
Repricing means switching to another package with your current bank. Refinancing means moving the loan to a different bank, which usually involves legal and valuation work. Check your facility letter for lock-in periods, notice periods and any clawback of subsidies.
Does TDSR apply when I refinance my home loan?
MAS exempts owner-occupiers refinancing their housing loan from the TDSR threshold. Investment property loans can be refinanced above the threshold only if the borrower commits to repaying at least 3% of the outstanding balance over up to 3 years and meets the bank's credit assessment.
What was 3M compounded SORA in October 2026?
MAS published 3-month compounded SORA at 1.23% on 8 October 2026. Floating home loan rates are usually quoted as SORA plus a spread set by the bank.
In this simulation, which option had the lowest 24-month cost?
Under the stated assumptions, refinancing to a floating loan at 1.93% (SORA 1.23% plus an assumed 0.70%) had the lowest 24-month cost, about S$36,600 including an assumed S$3,000 switching cost, against about S$52,400 if nothing changed. If SORA rises by 1 percentage point after a year, repricing at a fixed 2.20% comes out cheaper.