Property Financing · Singapore
Both refinancing and property equity cashout let you leverage the value of a property you own — but they serve completely different purposes, carry different costs, and suit different borrowers. Choosing the wrong one can cost you tens of thousands of dollars. Here is how to compare them properly.
Before comparing them, it is worth being precise about what each term means — because they are often confused.
Replacing your existing home loan with a new one — typically at a lower interest rate, from the same or a different bank. The loan amount stays the same. You are not accessing new cash — you are reducing the cost of your existing debt. Refinancing completely extinguishes your existing debt facility. Funds from the new bank pay off the outstanding balance at your previous bank, transferring the mortgage lien.
Borrowing an additional amount on top of your existing mortgage — secured against your property's equity. You receive new cash. The loan amount increases. Also called a home equity loan, equity term loan, or mortgage equity withdrawal. Cash-out refinancing releases cash by borrowing against the equity in a private property — structured as a refinance of the existing mortgage into a bigger loan, or as a separate equity term loan alongside the current mortgage.
Refinancing reduces your interest cost on existing debt — no new cash. Equity cashout gives you new money — at the cost of a larger loan secured against your property. They are not interchangeable. The right choice depends entirely on what you are trying to achieve.
Singapore mortgage rates have fallen significantly since 2024. Current best mortgage rates are between 1.39% and 1.95% p.a. across most property types as of September 2026. This makes both refinancing and equity cashout significantly cheaper than in 2023–2024 when rates were above 4%.
| Product | 2026 indicative rate | Structure | Notes |
|---|---|---|---|
| Standard refinancing (SORA-based) | 1.35%–1.95% p.a. | Floating — 3M SORA + spread | Best rates for loans ending before age 65 |
| Fixed-rate refinancing | 1.35%–2.12% p.a. | Fixed 1–3 years, then floating | Fixed rates stabilised between 1.35% and 2.12% in 2026 |
| Equity cashout (SORA-based) | ~1.5%–2.3% p.a. | Floating | DBS 2.2%, OCBC 2.1%, UOB 2.3% (SORA-based, subject to change) |
| Equity cashout (older borrowers) | ~4%–6% p.a. | Fixed or floating | Higher rates apply for shorter tenures at 65+ age profiles |
Refinancing on a long tenure (20–30 years) gets the keenest rates — banks price long-term secured debt cheaply. Equity cashout on a shorter tenure (5–10 years) or for older borrowers carries a higher rate premium. If you are under 60 with a long remaining tenure, refinancing with a cashout component gets you access to capital at near-mortgage rates.
| Factor | Refinancing | Equity Cashout |
|---|---|---|
| Purpose | Reduce interest cost on existing loan | Access new cash from property equity |
| New cash received | ❌ None | ✅ Yes — lump sum |
| Loan amount | Same as current outstanding | Increases — up to 75% LTV |
| 2026 rate range | 1.35%–2.12% p.a. | 1.5%–6% p.a. depending on profile |
| Approval speed | 2–4 weeks | 4–8 weeks (valuation required) |
| Income check | TDSR applies | Waived at ≤50% LTV (MAS exemption) |
| Lock-in period | Typically 1–3 years | Typically 1–3 years |
| Legal fees | $1,500–$3,000 (some banks subsidise) | $2,000–$4,000 |
| Valuation required | Sometimes — bank-dependent | Yes — always |
| Best for | Lowering monthly repayments | Accessing capital for investment, business, retirement |
| HDB eligible | Yes (refinance to bank loan) | ❌ No — private property only |
Both options involve costs that eat into the benefit. Understanding them helps you calculate whether the move is worth it.
| Cost item | Refinancing | Equity Cashout |
|---|---|---|
| Legal fees | $1,500–$3,000 (often subsidised by new bank) | $2,000–$4,000 |
| Valuation fee | $300–$500 (sometimes waived) | $300–$500 |
| Processing fee | Often waived | $500–$1,000 |
| Early repayment penalty | 1.5% of outstanding loan (if in lock-in) | 1.5% of outstanding loan (if in lock-in) |
| Broker fee | Nil (banks pay broker commission) | Brokerage fee applies — discuss with VeFi |
| Total typical cost | $2,000–$5,000 | $3,000–$6,000 |
Break-even in 6–12 months if rates drop 0.5% or more after fees of $2,000–$5,000. For an $800K loan: old rate 3% ($3,800/month) to new rate 1.6% ($3,200/month) saves $600/month, payback in about 4 months after a $2,500 rebate. Always calculate your break-even period before refinancing.
Refinancing works especially well if your current rate is above 3.5% and your property has appreciated in value — you may even unlock equity in the process.
For borrowers who both want a lower rate AND need cash, the most efficient structure is a cash-out refinance — replacing the existing mortgage with a new, larger loan at a better rate, taking the difference as cash.
This is available when:
Mr Lim refinances his $500K mortgage into a new $800K loan at 1.8% p.a. He receives $300K cash for his business. Monthly saving on the existing $500K portion: approximately $830/month at the lower rate. He gets capital and a lower rate in a single transaction.
Mdm Tan does not need cash — she just wants lower repayments. She refinances to SORA + 0.8% (approximately 1.9% p.a.) from DBS. Monthly saving: approximately $1,050/month on a 20-year tenure. Total legal and valuation costs: $2,500 (subsidised by DBS). Break-even: 2.4 months. Clear winner: refinance.
Mr Chen has no existing mortgage to refinance. He needs cash. At 50% LTV: $1.1M available — TDSR fully exempt, no income check needed. VeFi structures a 3-year interest-only facility at 5.5% p.a. with a bank offering a 75-year age ceiling. Monthly cost: $3,438. Mr Chen stays in his home. The refinancing conversation is irrelevant here — he has no existing loan.
Mdm Lee has equity and a high existing rate. Best solution: cash-out refinance — replace $800K at 3.2% with $1.2M at 1.9% p.a. She gets $400K cash, reduces her rate by 1.3%, and pays a single set of legal fees. VeFi compares across DBS, OCBC, and UOB to find the best package for her combined need.
Repricing is a third option that sits between doing nothing and full refinancing. Repricing means switching to a new loan package within your current bank — it lowers your interest rate without changing banks or legal terms, with no need to engage a law firm or redeem the loan.
Repricing is cheaper and faster than refinancing — typically no legal fees and done in 2–4 weeks. The trade-off is that you stay with your current bank and cannot take cash out.
| Option | Rate saving | Cash out? | Cost | Time |
|---|---|---|---|---|
| Repricing | Moderate — retention rate | ❌ No | Minimal | 2–4 weeks |
| Refinancing | Best — acquisition rate | ❌ No | $2,000–$5,000 | 3–6 weeks |
| Equity cashout | N/A | ✅ Yes | $3,000–$6,000 | 4–8 weeks |
| Cash-out refinance | Best — acquisition rate | ✅ Yes | $3,000–$6,000 | 4–8 weeks |
If all you need is a lower rate and do not want the hassle of changing banks — ask your current bank about repricing first. If you want the best possible rate or need cash — refinancing or cashout through a broker will deliver better outcomes.
For more on property equity cashout, see our Complete 2026 Guide to Property Equity Cashout. For the TDSR 50% LTV exemption in detail, see TDSR Explained in Plain English. For how much you can borrow, see How Much Can I Borrow Against My Property in Singapore?
VeFi compares refinancing and equity cashout packages across DBS, OCBC, UOB, Standard Chartered, Maybank, CIMB, and Hong Leong Finance — and recommends the right structure for your specific situation. Free assessment, 48-hour response.