Minimum Loan Before We Will Broker
The MortgageWise Team has been diligently advising clients with home loans of all sizes since 2014.
However, since 2018 we have decided to set a min. loan size of S$300,000 which was further increased to min. loan S$400,000 effective 2026 and we have good reason for that.
Our consistent findings and conclusion since we started operations – when the loan size goes below S$400,000, the transaction costs involved in refinancing a home loan often outweighs the interest savings one hopes to achieve through such a move.
Costs Breakdown for Refinancing
There are always two sets of transaction costs involved for refinancing a home loan from one bank to another: Legal fee & valuation fee. Here’s a quick snapshot:
For HDB Properties
Legal fee: $1,600 to $1,800
Valuation fee: $200 to $250
Total transaction costs: ~$2,000
For Private Properties
Legal fee: $1,800 to $2,000
Valuation fee: $350 to $500
Total transaction costs: ~$2,500
For Commercial Properties
Legal fee: $2,300 to $2,500
Valuation fee: $500 up
Total transaction costs: ~$3,000
Most banks do not provide legal subsidy/cash rebate (or in full) for refinancing outstanding loan balances of $400,000 or lower. As such with a loan balance of $400,000, to breakeven on these transaction costs alone, you will need to achieve a minimum savings on interest of more than 0.50% (every 0.1% is $400 in one year) over a minimum two year lock-in period, or 0.25% per year.
To make sense of any such refinancing move after putting in all the time and effort, you have to achieve substantially more than 0.50%. It is highly unlikely you will achieve such a substantial savings compared to what your own bank will quote you and you’re likely better off staying put.
Having said that, some banks do provide subsidy for HDB properties from a minimum loan of $250,000 in view of the smaller quantum involved. Those with HDB property loans of $250,000 to $400,000 may wish to approach the banks directly.
To better align all processes as we are a small team, we have decided a minimum loan of S$400,000 before MortgageWise will broker any case. We do seek your understanding for any inconvenience caused.