Insights

Your Lock-In Ended. Your Clawback Didn't.

Two clocks start the day your loan is disbursed, and they do not run for the same length. The lock-in is usually two years; the legal-subsidy clawback is usually three. With 3-month compounded SORA at 1.13%, the gap between those two dates is where the money leaks.

By TRIBE Editorial · 20 August 2026 · 6 min read

Refinancing arithmetic is unusually loud this year. Three-month compounded SORA was 1.13% on 18 August 2026, with the six-month tenor at 1.11% (MAS series, via HousingLoanSG), and the cheapest advertised fixed packages are printing in the 1.3–1.4% range. Anyone still servicing a loan signed at 2.something per cent is paying for a rate environment that no longer exists.

So the owner checks one date — the end of the lock-in — and starts the paperwork. There is a second date on the same loan agreement, it is usually twelve months later, and almost nobody has it written down.

What the bank actually handed you at signing

When you took the loan, the bank almost certainly paid for some of your costs. The standard package includes a legal subsidy of roughly S$1,500 to S$3,000, often a valuation fee waiver, and occasionally a cash rebate (Cashew).

That money is not a gift, and it is not really a discount either. It is an advance against interest the bank expects to earn from you over a minimum period. The clause that recovers it if you leave early is the clawback.

Two clocks, two different penalties

The lock-in and the clawback get conflated constantly, including by people selling mortgages. They are separate provisions, they are triggered by different things, and they very often expire on different dates.

	Lock-in penalty	Legal-subsidy clawback
What it is	A fee for exiting early	Repayment of cash the bank already spent on you
Typical size	~1.5% of the outstanding loan	The subsidy itself, commonly S$1,500–S$3,000
On a S$800,000 balance	About S$12,000	About S$2,000
Typical length	2 years, usually matching the fixed term	3 years, measured from disbursement
Prorated?	No	Sometimes — some banks scale it down, others demand the full amount on day 1,094

The asymmetry in the last row is the point. A three-year clawback attached to a two-year lock-in means there is a twelve-month window in which you are free to leave and still have to pay to do it. Industry write-ups describe this as standard rather than exceptional (DollarBack Mortgage).

The gap, priced

Take a loan with S$800,000 outstanding and 25 years left to run at the moment you refinance. Costs assumed: new legal fees S$2,500, offset by a S$2,000 subsidy from the incoming bank, plus a S$500 valuation. Net switching cost after the clawback has expired: S$1,000. Inside the window, add a S$2,000 clawback: S$3,000.

Moving from	New rate	Monthly instalment	Monthly saving	Breakeven inside the window	Breakeven after it lapses
2.60%	1.40%	S$3,629 → S$3,162	S$467	6.4 months	2.1 months
1.90%	1.40%	S$3,352 → S$3,162	S$190	15.8 months	5.3 months
1.60%	1.40%	S$3,237 → S$3,162	S$75	39.9 months	13.3 months

Read the top row first. Someone carrying 2.60% saves S$467 a month, so even paying the full clawback they are ahead within seven months. Waiting a year for the clawback to lapse in order to save S$2,000 costs them S$5,608 in forgone savings. On a wide rate gap, the clawback is a rounding error and the delay is the expensive decision.

Now read the bottom row. At a 20-basis-point gap the same S$2,000 pushes breakeven from thirteen months to nearly forty — longer than most people keep a package. Here the clawback does not just shave the return; it inverts the answer.

The clawback matters in inverse proportion to the size of your rate gap. That is the whole rule, and it is the opposite of how the clause is usually talked about — as a fixed trap that should always make you wait.

Repricing is the door that usually isn't alarmed

Staying with your existing bank on a new package — repricing — is generally not a redemption, so it typically triggers neither the lock-in penalty nor the clawback. It carries its own administrative fee, commonly in the region of S$500–S$800, and the rate on offer is usually a little worse than what a competitor would quote to win you.

That trade is often worth making during the clawback year and rarely worth making after it. We have laid out the full cost comparison in refinancing versus repricing. Get your bank's answer in writing before you assume your case is the standard one.

The triggers people don't expect

Redeeming the loan is the obvious one. These are not:

Partial prepayment above the bank's free threshold. Many packages allow a limited annual lump sum; exceed it and you can trip the clause.
Partial discharge. Selling a co-owner's share — a decoupling — discharges part of the facility and can count as an early exit.
Selling the property. Some contracts waive the clawback on a genuine sale. Some do not. This is bank-specific and it is written down.

Four questions before you sign anything

How long is the lock-in, and how long is the clawback? Ask for both in months, from disbursement.
Is the clawback prorated or all-or-nothing?
What is the free partial-prepayment allowance, and does breaching it trigger the clawback?
Is the clawback waived on sale of the property?

None of this argues for refusing subsidies. A S$2,000 subsidy on a package you intend to hold for three years is simply free money. It argues for knowing the price of changing your mind, which is a different thing.

Put both dates in your calendar on the day the loan is disbursed — lock-in expiry and clawback expiry — and set the reminder for the earlier one four months ahead. Refinancing paperwork takes six to eight weeks. The owners who lose money here are almost never the ones who read the clause; they are the ones who found out about it in a redemption statement.

Figures are computed on a 25-year amortising loan of S$800,000 at the rates shown, gross of any package-specific fees. Subsidy, legal, valuation and repricing amounts are typical market ranges, not quotes — your loan agreement governs. Methodology published. No spin.