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Everything You Need To Know About A Refinancing Calculator

Are you planning to procure a refinancing loan to aid your financial stability? Follow this article to learn more about refinancing options and how they help you save money.

When Should You Refinance Your Home Loan
What Type Of Property Are You Refinancing

When you have an outstanding loan and get a better offer with more convenient loan facilities, you will undoubtedly love to switch your existing loan installments with the new one.

This process refers to the term refinancing, which ends your current loan package and carries your loan repayment period or monthly installments to a new bank.

But do you need a financing calculator that can help you calculate the loan interest rate, lock-in period, and loan repayment schedule?

Well, you do, and in this article, we will help you understand how a refinancing calculator or loan affordability calculator can help you get the best loan to refinance options, including minimum and maximum home loan amounts.

Why Should I Refinance My Mortgage Home Loan

What Is Refinancing?

Refinancing can help you switch your existing residential property loans or outstanding loan balance to a new one with minimum loan requirements and lower interest rates.

In short, you can save money by choosing better loan tenure and mortgage loans from your preferred financial institution.

But why should you opt to refinance your remaining loan amount with a different bank?

Although most banks offer competitive rates and maximum loan tenure with their wide range of loan packages, you may witness a hike in the interest rate after 3 years.

So, opting for a refinancing option is the best thing you can do to get a lower monthly home loan installment.

Furthermore, the current interest rates of SOR and SIBOR indicate that banks would likely increase them in the future.

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What Is The Cost Of Refinancing

What Type Of Property Are You Refinancing?

Although refinancing may sound lucrative for borrowers, it is only limited to private properties.

In short, you can use the loan refinancing option only for private property, provided you fulfill the eligibility conditions.

However, the refinancing option does not work with private property financed under an HDB concessionary loan.

Furthermore, if you are converting your HDB housing loan to a bank home loan with your current bank, you cannot use the HDB option in the future.

So, evaluating your loan requirements and understanding current market situations by consulting finance advisors will undoubtedly help you to get better results.

Compare Singapore Refinancing Home Loans

As we all know, the primary purpose of a loan calculator is to find the best loan packages after comparing the credit facilities of different finance companies.

In short, a loan calculator will help you with credit evaluation and credit assessment criteria to help you get the maximum or minimum loan size.

Here is a comparison table that will help you understand the different refinancing options offered by different banks in Singapore.

Please note: The following chart depicts refinancing options for a 25-year HDB loan from different banks with competitive housing loan interest.

You can visit a finance expert like PropertyGuru Finance for more information on current loan packages for private residences or commercial properties.

Bank

Total Interest Cost (Singapore $)

Interest Rate Type

Interest Rate

Loan Lock-in period

Monthly repayments

(Singapore $)

DBS Board

$139,300

Floating

2.05% (interest rate for 1st year)

2 years

$2,131

OCBC

$143,848

Floating

2.02% (interest rate for 1st year)

2 years

$2,125

CIMB

$149,644

Floating

1.90% (interest rate for 1st year)

2 years

$2,095

RHB

$159,736

Floating

2.07% (interest rate for 1st year)

2 years

$2,137

HSBC

$160,300

Floating

1.97% (interest rate for 1st year)

2 years

$2,113

Standard Chartered

$161,284

Floating

1.87% (interest rate for 1st year)

1 year

$2,089

Citibank

$163,180

Floating

2.07% (interest rate for 1st year)

2 years

$2,137

 

This chart will help you understand the current HDB refinancing loan scenario in Singapore, including the current home loan rates.

However, refinancing loan interest rate packages can change depending on market conditions, so it would be best to consult an expert before finalizing a loan package.

Additionally, flexible financing solutions can also help you stabilize your monthly repayment schedule without putting pressure on your monthly income.

Reasons Borrowers Refinance

Since interest rates for home loans depend on market conditions, you may witness a significant jump in your rate package after some time.

So many borrowers choose to refinance their existing home loans to get competitive or exclusive home loan rates.

Here are the reasons why borrowers prefer the refinancing option with different banks to get competitive home loan packages.

To reduce mortgage costs

Refinancing allows borrowers to save money on monthly payments, which helps the borrowers save more throughout the entire loan tenure.

However, the actual savings depends on various factors, including the loan application fees (valuation fees, processing fee, and loan conveyancing matters), interest rates, and the size of the home loan.

To enhance flexibility

While the primary reason for choosing a home loan is to cover your property purchase price, your requirements might change after acquiring the loan.

Since private units are the type of property eligible for refinancing, your current loan contract may not suffice your requirements.

For instance, if you have some money left after paying your monthly installments, you can use the cash proceeds to make partial repayments and reduce the total loan amount.

This ability to opt for flexible loan plans makes refinancing an excellent choice for borrowers who want holistic home loan solutions.

To pay equities

You can use the refinancing option to pay equities and lower your housing loan quantum.

For instance, if your current home loan package is taking a toll on your monthly income sources, you can gain control of finances by refinancing your existing home loan.

However, ensure that you consult a financial advisor before using the cash rebate option.

To benefit from subsidies

Financial institutions and banks offer various incentives to lure new borrowers.

These incentives often come with better credit lines and a convenient loan approval process for borrowers.

However, ensure that you check the terms and conditions of these bank loans and evaluate the requirements like clawback period, legal costs, arrears for housing loan, and loan acceptance details before moving forward.

What Is Refinancing

Why Should I Refinance My Mortgage Home Loan?

Your current home loan package might initially look like the cheapest loan type.

However, as your home loan ages, you will witness a hike in interest rates and loan liability, which might increase your credit card debts.

For instance, a UOB HDB home loan or UOB home loan might sound interesting initially, but it may witness some changes, depending on the market conditions.

Likewise, you can expect similar results with an Eco-Care home loan or any other attractive home loan package.

Refinancing gives borrowers a wide choice of financing where they can reap benefits through a combination of cash and low-interest rewards.

In short, you can enjoy lower monthly installment loans, provided you fulfill all the terms and conditions for an eligible loan (refinancing).

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Should You Refinance Or Not

How Much Can You Save When You Refinance?

Suppose you finance your $400,000 HDB flat through an HDB-granted loan, using $60,000 for the down payment with your CPF account.

So, the remaining $340,000 will turn into an HDB loan with $1,543 as the monthly installment.

After completing your 4th year, you can opt for a refinancing loan to pay the remaining $250,000 for 5 years.

Once you complete all the eligibility requirements like credit score check, maximum home loan quantum, income documents, and remaining days on condition, you can avail your refinancing loan.

Your monthly installment will now come down to $1,000 instead of $1,134, saving you a total of $8,040 over the next five years.

Repricing Vs Refinancing GCo WhatGCOs The Difference

When Should You Refinance Your Home Loan?

Although you can opt for refinancing at any time, you should finish your lock-in period before switching to a new loan.

If you don’t, banks will usually charge a 1.5% lock-in penalty, which can often turn from a $200 to $450 pre-payment penalty, depending on your property or flat financing amount.

Furthermore, this penalty can also differ for commercial & Industrial property financing flexible plans, according to the market conditions.

However, you don’t have to wait for the lock-in period to end to submit your refinancing request.

Reasons Borrowers Refinance

What Is The Cost Of Refinancing?

Refinancing covers various costs, including prepayment penalty, cancellation fees, legal charges, clawback fees, and valuation fees.

In short, if you opt for a refinancing option without consulting a mortgage consultant, you may witness a difference in cash and interest rates instead of a cash reward.

Furthermore, you may end up paying more monthly installments compared to your regular loan, which can hinder your competitive interest savings.

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Repricing Vs Refinancing – What’s The Difference?

Although refinancing and reprising have some similarities, like evaluating the current bank loan statement and credit card details, they are different from each other.

For instance, refinancing means switching your existing loan from your current bank to a different bank after evaluating the loan interest offset feature.

On the other hand, repricing means switching your existing loan account to a new one within your current bank.

While both can offer better interest rates, the cost in cash, or interest-free cash in some cases, it would be best to consult a financial expert for loan recommendations before switching your existing loan.

Should You Refinance Or Not?

Refinancing your existing loan might seem like a bridging loan with similar banking requirements like credit card funds transfer history and other conditions.

However, refinancing offers you better options and lower interest rates to help you save more on your housing loan.

In short, refinancing is like a good business day where you can enjoy maximum benefits with lower interest rates.

However, refinancing is not an option if HDB concessionary housing loans finance a private property.

Other than that, refinancing is an attractive option for borrowers who want to save money in the long run.

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