Mortgage Prepayment Penalty Calculator Singapore 2026
Lock-In Penalty, Legal Subsidy Clawback, Break-Even Months & Refinancing Cost-Benefit
Calculate the true cost of breaking your Singapore home loan’s lock-in period — whether you are refinancing to a lower rate, selling the property, or making a large lump-sum partial repayment. The penalty is typically 1.5% of the outstanding loan, but the total exit cost also includes any legal subsidy clawback (if your bank paid your refinancing legal fees) and admin fees. This calculator also performs a complete refinancing cost-benefit analysis: how much you save monthly at the new rate, how many months to break even on all exit costs, and the net lifetime saving over the remaining loan tenure.
Amount bank paid for your legal fees at last refinancing (to be returned)
How many months of lock-in remain. Enter 0 if you are outside the lock-in period (no penalty applies).
Enter a partial prepayment amount to see the penalty on this specific amount (if within lock-in). Some banks allow up to 10% of outstanding per year without penalty — check your loan agreement.
Enter outstanding loan, current rate, penalty percentage, and optionally the new refinancing rate to see total exit cost, monthly saving, and break-even analysis.
Singapore Mortgage Prepayment Penalty 2026 — Lock-In Period, Clawback & When to Break
Most Singapore home loans come with a lock-in period — typically 2–5 years — during which you cannot fully redeem, refinance, or partially prepay beyond the allowed amount without paying a penalty. The penalty exists because banks offer lower interest rates in exchange for the borrower’s commitment not to switch early. Breaking the lock-in triggers a prepayment fee (typically 1.5% of outstanding balance), plus potentially a legal subsidy clawback if the bank paid your legal fees at refinancing. The question is always: does the saving from the new lower rate outweigh all exit costs?
Singapore Mortgage Lock-In Penalty Structure 2026
| Item | Typical Amount | Notes |
|---|---|---|
| Prepayment penalty | 1.5% of outstanding | On outstanding balance (most common) |
| Some banks charge on | 1.5% of original loan | More expensive — check your LOO |
| Legal subsidy clawback | S$1,800–S$3,500 | If bank paid your legal fees last time |
| Admin / processing fee | S$200–S$600 | Some banks charge; others do not |
| Partial prepayment | Varies | Some allow 10%/yr free; check LOO |
| New bank legal costs | S$2,000–S$3,500 | Often subsidised by new bank |
Lock-In Period Comparison by Loan Package Type
| Package Type | Lock-In Period | Penalty | Rate Typically |
|---|---|---|---|
| Fixed rate (2yr) | 2 years | 1.5% | Lower (predictable) |
| Fixed rate (3yr) | 3 years | 1.5% | Lowest fixed |
| Floating (SORA-linked) | 1–2 years | 1.5% | Variable |
| No lock-in package | 0 months | None | Higher rate |
How This Prepayment Penalty Calculator Works
Step 1 — Enter Current Loan and Penalty Terms
Enter your outstanding loan balance, remaining tenure, and current rate. Enter the penalty percentage (from your Letter of Offer) and whether it is on the outstanding balance or original loan amount. Add any legal subsidy clawback (check your previous refinancing documents) and remaining lock-in months.
Step 2 — Enter New Rate for Break-Even Analysis
Enter the new bank’s offered rate. The calculator computes your monthly saving (current minus new payment), total switch cost (penalty + clawback + new legal fees), and the break-even month — when cumulative savings equal all exit costs. Below 24 months is typically a strong case to refinance.
Step 3 — View Net Lifetime Saving and Recommendation
The result shows the net lifetime saving over the remaining tenure after subtracting all costs. The line chart shows cumulative savings vs the fixed switch cost — the crossover is the break-even point. If break-even falls within the remaining tenure, refinancing is recommended.
3 Real Singapore Refinancing Examples — Worth It, Borderline & Better to Wait
S$900K Loan, 1.5% Rate Drop
S$600K Loan, 0.5% Rate Drop
Selling Property in Lock-In
3 Expert Tips — Negotiate the Clawback, Use the 10% Allowance & Time Your Exit
Negotiate the Legal Clawback with Your Current Bank Before Switching
If your current bank paid your legal fees when you refinanced to them (S$2,000–S$3,500 subsidy), they typically require this back if you leave within the lock-in period. However, this clawback is often negotiable. Call your bank’s retention team and explain that a competitor is offering you a significantly lower rate. Banks have incentives to retain customers: (1) they may offer to match or beat the new rate (no need to switch at all); (2) some banks will waive the legal clawback as a “goodwill” gesture for long-standing customers; (3) others offer a partial waiver (e.g., S$1,500 instead of S$3,000). Always call the retention team before signing with the new bank — your existing bank’s competing offer might be better than the clawback cost of switching.
Use the 10%/Year Partial Prepayment Allowance to Reduce Principal Without Penalty
Many Singapore bank mortgage packages allow partial prepayment of up to 10% of the outstanding balance per year without triggering any penalty, even during the lock-in period. On a S$900,000 loan: 10% = S$90,000/year you can prepay penalty-free. Strategy: (1) instead of making a large lump sum (which triggers penalty), spread prepayments across multiple years within the 10% limit; (2) time the prepayment to the anniversary of your loan drawdown (some banks reset the 10% allowance annually from drawdown date); (3) use the Mortgage Refinancing Savings Calculator to compare the interest saved by prepayment vs investing the same amount in T-Bills or SSBs. Always confirm your specific bank’s partial prepayment terms in your Letter of Offer.
Time Your Refinancing to Lock-In Expiry — Start the Process 3 Months Early
The optimal strategy: begin refinancing 3 months before lock-in expiry. Process: (1) get mortgage offers 3–4 months before expiry; (2) compare rates and negotiate; (3) select bank and sign in-principle approval ~3 months out; (4) submit formal application ~2 months out; (5) legal process ~4–6 weeks; (6) complete on or just after lock-in expiry date — zero penalty. Many homeowners miss the exit window by starting too late and then pay months of extra interest at the old rate while scrambling to refinance. Set a calendar reminder 4 months before lock-in expiry. This single act of timing can save S$5,000–S$15,000 in both penalties and interest on a large loan.
