Mortgage transfer: costs and options
The mortgage interest rate is rising. This is the time to take out your mortgage. Read about the costs for mortgage refinancing and the options.
Mortgage transfer for lower interest
The mortgage interest is historically low. Not only with the purchase of a home can you benefit from this. You can also lower your monthly payment with an existing mortgage, namely by transfer.
What is reshaping?
With rescheduling you close a new mortgage with which you pay off the old one. Because the new mortgage has a lower mortgage interest rate than the old one, you are going to save.
You also incur costs. Therefore, it is only beneficial to transfer the mortgage if the saving is greater than the costs. Because you take out a new mortgage, you can also re-establish the conditions in the event of a transfer.
What are the costs for transferring?
When transferring, you break the current mortgage contract. Your current lender charges a penalty interest for this.
The amount of the fine depends on the mortgage amount, the end date of the fixed-interest period and the interest. In addition, you can often repay a percentage without penalty.
In addition to the penalty interest, you pay a closing fee for your new mortgage when you transfer it. You should think about: advice fees, notary fees and appraisal fees
You pay the transfer costs once and all at once. This is sometimes a barrier for homeowners to take out a mortgage. The refinancing costs can be included in the new mortgage, provided there is room for this. In addition, the costs for mortgage transfer are tax deductible under certain conditions.
Can it be redistributed without penalty?
It is only possible to withhold the mortgage without a penalty at the end of the fixed-interest period. You will then receive a new interest rate proposal from your bank. This is also the time to compare the mortgage rates of other lenders in the market. Re-transfer is then free of fines.
Interest rate averaging is sometimes seen as transfer without penalty. Wrongly! With interest averaging, you do pay a fine, only this is settled in the new mortgage interest. In addition, you stay with the same bank, so the savings are often lower. Read more about the difference between interest averaging and transfer.
Mortgages don’t always profitably
In addition to a potentially high penalty interest rate, there are more situations in which refinancing the mortgage is not beneficial:
- The new mortgage is tested against the current mortgage standards and must of course fit.
- Lenders sometimes take over an interest-only mortgage. With a NHG mortgage this is a maximum of 50%.
- With a (bank) savings mortgage, switching to a lower interest rate can be unfavorable. Buying the savings mortgage (tax-free) is then an alternative.
Therefore, always have a mortgage advisor investigate your options for re-lending. A first analysis is free and without obligation.