Refinance your loan: good idea or not? | Consolidation of Loans
You have undoubtedly heard or read it somewhere: the long-term interest rate is exceptionally low. In August he even fell below the historic limit of 1.3 percent, and even today interest rates are favorable to borrowers.
But what if you have previously taken out a mortgage loan? Then there is the possibility to review or refinance your loan. Find out if this option is also interesting for you here!
Reviewing a loan: what does it mean?
If you take out a loan, you do so at the interest rate that is in force at the time of signing. But the long-term interest rate is of course not standing still. Chances are that today you take out a much cheaper interest rate compared to ten years ago. Fortunately, you don’t have to leave it at that observation.
You can have your loan reviewed or refinanced, which means that from now on you will also be borrowing at the current, advantageous interest rates. Although there are of course a number of conditions, which we zoom in below.
What are the conditions?
Refinancing a loan is only interesting if the difference between your current and the revised interest rate is large enough. Refinancing involves a number of costs. We list them for you:
- Three months reinvestment compensation (three months interest on the repaid amount).
- File costs.
- Notary fees: Only when you take out a new mortgage with another lender.
- The revision of the linked debt balance insurance, home insurance, current account, etc. can also entail additional costs.
Please note: the borrowing conditions may be cheaper at another bank, but at the same time the costs will be higher than with an internal loan revision. Bear in mind that the interest rate must be at least 1% lower in order to effectively take advantage of a bank switch!
A simulation brings advice
Whether or not your revised loan is a good thing depends on your personal mortgage situation. Do you have a fixed or variable interest rate? How many years do you have to pay off? What sum did you borrow? They are all factors that have an influence.
The best way to estimate your benefit is therefore an objective simulation, such as that of savings guide.be. The simulator takes into account the differences in interest rates as well as the costs that the new mortgage loan entails. Do you want to know more about the consequences for your balance insurance or are you looking for the most affordable formula? Please contact us. We are ready for you!