Local Banks See Rise in Mortgage Refinancing After Rate Cuts in 2024

Potential savings, attractive terms and perks from institutions among factors cited

- Grace Leong

Mortgage loan refinancing and repricing activity by private home owners and Housing Board flat owners picked up significantly in 2024 after fixed mortgage loan rates fell below 3 per cent from the second quarter.

Following the US Federal Reserve's successive rate cuts from September 2024, local banks told The Straits Times that they saw a more pronounced increase in mortgage loan refinancing and repricing transactions.

Refinancing involves taking out a new home loan with a different bank after the current loan exits the lock-in period.

Repricing, meanwhile, refers to switching to a new loan package with the existing bank after the lock-in period for the current loan ends.

UOB saw HDB loan refinancing transactions climbing 85 per cent in 2024 from a year ago, and rising 60 per cent year on year for the June-November 2024 period.

Private residential loan refinancing transactions for 2024 rose almost 15 per cent from 2023.

Ms Jacquelyn Tan, UOB's head of group personal financial services, cited "potential savings from a lower interest rate environment, as well as attractive terms and perks offered by financial institutions".

Ms Chelsea Ling, head of home financing at DBS Bank's consumer banking group in Singapore, noted that many of its customers have been inquiring about one-year to three-year fixed-rate home loan packages, which range from 2.6 per cent to 2.9 per cent per annum.

"This trend is particularly prominent among customers whose existing loans have exited the lock-in period and are currently on floating rates, which remain higher than fixed rates," she said.