Is That A Good Time To Refiance Your Home Loan Now?

Why so many HDB owners are refinancing recently?

You might have noticed a lot of HDB flat owners in Singapore are switching from the usual HDB loan to bank loans lately. It’s mostly because bank loan rates have dropped to their lowest in years, and banks are really competing for customers by offering some pretty attractive perks.

What’s driving this rush?

First off, bank loans have gotten cheaper. While HDB’s concessionary loan stays fixed at 2.6%, banks are offering rates between 1.55% and 1.8%. Plus, the SORA rate, which many floating loans follow, has dropped from over 3.6% in 2023 to just 1.34% in October 2025 — the lowest in more than three years. So, if your lock-in period ended around 2022 or 2023, now’s a great time to think about refinancing.

On top of that, banks are throwing in some nice extras like cash rebates, help with legal fees, and even options to switch loans after the first year without extra charges. For example, if you switch a $400,000 loan from HDB to a 3-year fixed bank package, you could save around $3,600 just in the first year.

What do the numbers say?

One big bank reported a 60% jump in HDB owners refinancing in the first nine months of 2025 compared to the same time in 2024. If you look back to 2019–20, when floating rates dipped below 1.5%, refinancing also spiked by about 35–40% year-on-year. Seems like we’re seeing a similar trend now. Interestingly, about 9 out of 10 people are picking fixed-rate packages, probably because they want the peace of mind that comes with steady monthly payments.

What about private property owners?

Here’s a twist: private homeowners aren’t rushing to refinance. Instead, many are taking advantage of the low rates to sell their current place and upgrade to something bigger or better. So if you’re advising someone with private property, it’s worth mentioning that refinancing isn’t the only option — upgrading while rates are favorable could be a smart move.

Will the mortgage rate go lower or higher next year?

Looks like the three-month SORA will probably stay around 1.3% to 1.4% till the end of 2025 — so we might see the refinancing wave continue into 2026. But as Sebastian from Cashew Mortgages pointed out, most of the big rate drops have already happened, so don’t expect much more downward movement from here.

Chng from Redbrick also mentioned that refinancing demand should still be strong in the first half of 2026, though it might taper off later in the year once most people who locked in higher rates back in 2023–24 have already made the switch.

Some HDB owners are still a bit hesitant to move from the HDB loan to a bank loan since it’s a one-way decision — once you switch, you can’t go back. But if rates stay low or even dip a little more, it’s likely we’ll see more people taking the leap for those potential savings.

What does this mean for you?

• Timing matters: For those whose lock-in is over (5 years, or initial bank fixed-rate period completed), now is a great time to evaluate refinancing options.

• Fixed vs floating: Since many are opting for fixed-rate packages, it aligns with clients seeking certainty in monthly repayments (helpful when marketing to dual-income families).

• Cost-benefit check: While switching from HDB loan to bank loan often makes sense now, always run the numbers – legal fees, valuation, early-exit implications.

• Irreversibility: Once a flat owner switches from the HDB concessionary loan to a bank loan, the HDB loan option disappears for that property. Some homeowners remain cautious.

• Window of momentum: Analysts expect the favourable refinancing momentum to continue into early 2026, but they also caution that most of the rate decline may already have taken place. Thus, early movers may lock in the best benefit.