Refinancing a Property Loan in Singapore
Refinancing is the least dramatic thing we do and the easiest to get wrong on timing. The saving is real; so is the lock-in period you may still be inside.
Refinancing is the least dramatic work in this list and the easiest to mistime. The saving is usually real. So is the lock-in period you may still be inside.
Check three things before anything else
Are you still in a lock-in? Refinancing inside one generally triggers a penalty, and that penalty can be larger than the saving you are chasing.
What notice does your current lender require? Commonly three months. The entire timetable is built backwards from that date.
Is there a subsidy clawback? Legal subsidies from your existing lender frequently come with a period during which leaving means repaying them.
None of these is difficult to establish. All of them are expensive to discover late.
Refinancing is not repricing
Repricing is moving to a different package with the same lender. It generally needs no conveyancing at all, and if that is what you actually want, we will tell you so rather than open a file.
Refinancing moves the loan to a new lender, which means discharging the old mortgage and registering a new one.
The legal work itself
Redemption statement from the existing lender, discharge of the existing mortgage, new security in favour of the new lender, and the two coordinated so they complete on the same day. Where CPF monies are in the property, that is accommodated as part of it.
Commercial borrowers
The same shape with heavier documents. Where the borrower is a company there are corporate authorisations and a fuller security package, and the timetable stretches accordingly.
How we help
How we help
Check the lock-in and the notice period first
Before anything else. Refinancing inside a lock-in usually triggers a penalty that can exceed the saving, and the notice period dictates the whole timetable.
Act on the redemption
Obtaining the redemption statement, discharging the existing mortgage and making sure nothing is left registered against the property.
Put the new security in place
The new lender's mortgage and the conditions attached to it, coordinated so that redemption and the new facility land on the same day.
Deal with CPF where it is involved
Where CPF monies are in the property, the refinancing has to accommodate that rather than trip over it.
Advise on subsidies and clawbacks
Legal subsidies offered by lenders often come with a clawback period. Moving too early can mean repaying them, which is worth knowing before you commit.
Act for banks as well
We advise lenders as well as borrowers on financing and refinancing terms, which means the mechanics are routine here rather than occasional.