Refinancing is switching an existing home loan to a new lender, usually for a different rate or package. MAS generally caps a refinanced loan’s tenure at 30 years minus the years since the first loan was disbursed for an HDB flat, and 35 minus those years for other residential property (older purchases may qualify for longer); it sets no loan-to-value limit, and refinancing a home the borrower lives in needs no TDSR or MSR calculation, though the lender still applies its own credit assessment. An HDB loan can be refinanced with a bank, but a bank loan cannot be refinanced to an HDB loan.
Key takeaways
- MoneySense describes refinancing as switching an existing home loan to a new lender; refinancing at the current bank is repricing. HDB allows an HDB loan to be refinanced with a financial institution regulated by MAS (subject to the lender’s approval, CPF Board notes), but once refinanced it cannot come back to HDB — and a PR household that later becomes citizens still cannot move its bank loan to HDB. For MAS’s tenure and TDSR rules, a new facility from the same bank granted only to repay the existing housing loan also counts as a refinancing facility.
- MAS caps the tenure of a refinanced housing loan at 30 years minus X for HDB flats and 35 years minus X for other residential property, where X is the years since the first housing loan on the property was disbursed. Under Notice 632 these caps apply to refinancing applications on or after 28 August 2013 (HDB) and refinancing applications on or after 6 October 2012 (other property); longer tenures, up to the remaining tenure of the latest loan, are allowed where the option to purchase predates those dates: for a property the borrower occupies, and for a property the borrower does not occupy where the borrower meets TDSR at the capped tenure or commits to a Debt Reduction Plan.
- MAS sets no loan-to-value limit on a refinanced loan; the lender may lend up to the amount outstanding, subject to its credit assessment. TDSR and MSR are not required for refinancing the purchase loan on a home the borrower occupies, once the bank has evidence of owner-occupation. For other properties Notice 645 requires TDSR unless the borrower makes a capital repayment with the same rate formulation and no increase in tenure, shortens the tenure on the same formulation, or commits to a Debt Reduction Plan — at least 3% of the outstanding balance over not more than 3 years.
- CPF Board notes most bank loans carry a lock-in of about one to three years, and that refinancing to another bank within it could cost a penalty of around 1.5% of the outstanding loan, though terms vary by bank and package; legal fees, valuation fees and possible clawbacks are other costs. MoneySense lists penalties, clawbacks, legal fees and conversion fees as examples of charges.
- Where CPF savings are used for the property, the member’s lawyer submits the refinancing application to CPF Board, and CPF instalments to the old lender stop once it is approved. For an HDB flat covered by the Home Protection Scheme, CPF Board adjusts the cover automatically if the loan amount or period falls; if either rises, the member applies, and any increase is subject to approval and good health. Under the CPF Housing Scheme terms, CPF savings cannot pay miscellaneous costs such as penalties, for HDB and DBSS flats and private property alike.
What is refinancing, and what rules apply?
MAS’s refinancing rules set how long a refinanced home loan can run, how much can be lent and whether a debt-servicing test applies; its borrower-mortgagor and guarantor-borrower requirements also apply unless the option to purchase was granted before 29 June 2013.
Where TDSR is computed for a loan to buy residential property, MAS Notice 645 has the bank work out monthly interest at a medium-term rate: the higher of 4% and the thereafter rate where the option to purchase is dated on or after 30 September 2022, or of 3.5% and that rate where it is earlier.
How long a refinanced loan can run
MAS’s general caps by the years since the first loan was disbursed, for refinancing applications on or after 6 October 2012 (other property) and 28 August 2013 (HDB flats). Purchases whose option to purchase predates those dates may qualify for longer.
| Years since first disbursed | HDB flat | Other residential property |
|---|---|---|
| 3 years | 27 years | 32 years |
| 5 years | 25 years | 30 years |
| 10 years | 20 years | 25 years |
| 15 years | 15 years | 20 years |
| 20 years | 10 years | 15 years |
CPF Board’s indicative 1.5% penalty on an example SGD 400,000 loan
CPF Board says a penalty for refinancing within the lock-in could be around 1.5% of the outstanding loan, and that terms vary by bank and package. Money Snap’s arithmetic on that indicative figure; the actual charge depends on the bank and loan package.
Where refinancing shows up
Five things people get wrong
- MAS — Refinancing Rules for Housing Loans — tenure, LTV and TDSR on refinancing
- MAS — Notice 632 on residential property loans — the tenure caps and their dates
- MAS — Notice 645 on TDSR — the exemptions and the Debt Reduction Plan
- MAS — Who TDSR applies to — the owner-occupier exemption
- HDB — Refinance your HDB housing loan — the one-way move and the process
- CPF Board — HDB loan or bank loan? 3 differences — lock-in and refinancing costs
- CPF Board — Refinancing a housing loan — the CPF application
- CPF Board — HPS after refinancing — Home Protection Scheme cover
- CPF Board — CPF Housing Scheme terms — what CPF savings cannot pay
- MoneySense — How home loans work — refinancing, repricing and fees
Official MAS, HDB, CPF Board and MoneySense rules, for general information only. Not financial advice.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to MAS, HDB, the CPF Board and MoneySense and seek independent professional advice before making any financial decisions.