It has been 3 years since the purchase of my first property in Singapore. At the point of purchase, the loan that I signed up for had a 3 year lock-in period. Now that the lock-in period is up, I am looking at ways to reduce my interest expenses.
To do so, I have decided to refinance my existing loan. At the time of writing, I am still in the midst of restructuring the loan.
It is now a good time for me to examine the process. I hope to share what I have done right and what I could have done better.
#1 Benefits of refinancing
Interest rates for most bank loans will increase sharply after the lock in period. By refinancing with a new loan, you will end up with lower interest rates and hence reduce your interest expense.
In my case, the existing rates are as follows:
- First year: 1.2% fixed rate