Home Loan Refinancing Calculator

How refinancing savings are calculated

Refinancing compares two amortization schedules on the same remaining balance and tenure: the instalment you're currently paying (often your bank's board rate after a lock-in expires) against the instalment on a new package. The difference each month is your savings — but the real decision comes down to whether those savings outweigh the switching costs.

Worked example

Say you have $500,000 outstanding with 20 years left, currently sitting on a board rate of 4.00% after your lock-in expired. Your instalment is roughly $3,030 a month. A new 2-year fixed package at 2.35% on the same balance and tenure brings that down to about $2,615 — a saving of around $415 a month, or close to $4,980 a year. If the new bank offers a legal fee subsidy, your break-even is immediate; if you pay the roughly $2,000 legal cost yourself, you break even in about five months.

What changes the result

• Rate gap — the bigger the difference between your current rate and the new package, the larger the monthly saving.
• Remaining tenure — refinancing into a shorter tenure can raise the instalment even at a lower rate, so compare total interest, not just the monthly figure.
• Legal subsidy or cash rebate — a bank-covered subsidy shifts your break-even point to day one; paying your own legal fees pushes it out by several months.
• Clawback and lock-in penalties — refinancing before your current lock-in ends usually triggers a penalty (commonly 1.5% of the outstanding loan) that can wipe out a year or more of savings.

Common mistakes to avoid

• Refinancing without checking if you're still inside a lock-in or clawback period.
• Comparing only the headline rate and ignoring fees, subsidies and the new package's own lock-in.
• Refinancing into a much shorter tenure without checking the new instalment still fits comfortably.
• Waiting until the board rate has already applied for months before shopping for a new package.

If you're deciding whether to unlock cash from your property instead of just switching packages, see the cash-out equity loan calculator. To check the full amortization impact of a new package, use the amortization schedule calculator, or start from the main mortgage calculator to re-check your overall affordability first.