House loan re-financing cost

Here is the formula:

(legal fee – bank subsidy at 0.4%) + penalty + legal fee claw back

legal fee -- charged by lawyer, SG$1800~2000

bank subsidy -- normal term, bank will subsidize 0.4%

penalty -- if you still in lock in period

legal fee claw back -- similar to item 2, this is subsidy from your current bank, you need to payback if less than 3 years

So usually, you have to pay Legal fee again every time do re-financing. The point is the saving from interest greater than this cost or not.

The saving should include two factors: first, your monthly payment difference; secondly, the remain loan amount after lock in period.

And, normally, bank will set 100K or 200K as criteria for re-financing, so look for long term if your loan near 100K or 200K, because after that, you may have difficulty to re-finance.