When is the earliest you should refinance the home loan? You should refinance as early as possible to time the completion of refinancing closest to the day the lock in or legal fees subsidy clawback expires. Many Singapore home owners often leave it too late, incurring unnecessary interest.
Refinance 6 months earlier
As the maximum period of loan disbursement is 6 months, you should start looking at refinancing options earlier than 6 months before the expiry date. Most banks can wait up to 6 months after you accept the Letter of Offer (aka loan contract).
The minimum period should be 3 months before, as that’s how long the refinancing process takes. Banks in Singapore require you to serve them a notice period of 3 months if you decide to leave them.
The later you refinance, the more interest you may pay when the higher interest rates of existing loan kicks in.
Extension of loan tenure
Loan tenure for a new property purchase is up to age 65. Refinancing allows you to extend the loan tenure to age 70-75 depending on banks. We advise customers to choose a loan with zero lock in, so that you can refinance after few months to stretch the tenure. By doing so, the monthly repayments will be reduced and your TDSR is improved.
We actively monitor our customers’ loan contractual obligations and notify them of refinancing opportunities at the eariest possible time. This is how we help our clients save on interests.
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