In recent years, we have seen exceptionally low interest rates on mortgages, so if you took out your loan 10 years ago, you will find that your rate is high.
If you also want to take advantage of a low rate for your loan, know that it is possible to renegotiate in order to achieve substantial savings. In this way, you will be able to benefit from a lower monthly payment.
Currently, real estate interest rates are constantly falling. They have never been so low, so borrowers are tempted to renegotiate their loan in order to take advantage of them. If the operation is possible, it is not always advisable, especially with regard to fixed rate loans. Indeed, with this type of loan, interest represents a large part of each monthly payment at the beginning. But over the repayments, the monthly payment will only be made up of the capital to be repaid. If you renegotiate your loan after 10 years of repayment, for example, this will have no impact on the total amount of your debt.
For the renegotiation to be profitable, the share of interest in the monthly payment must be high, that is to say during the first third of the life of the credit. On the other hand, it is not always appropriate to move on to the renegotiation of your mortgage insofar as this generates relatively substantial additional costs. Therefore, if the savings envisaged are not much greater than these costs, it is better not to start. To find out how much you can save by renegotiating the loan, it is recommended to perform online simulations.
Renegotiating a home loan is not free of charge. This is, moreover, one of the most important criteria to consider when you are preparing to have your loan redeemed by another banking organization. However, in order to limit or eliminate the additional expenses, it is advisable to try a negotiation with your current bank. Seeing no particular interest in it, she is likely to refuse it to you, but it is up to you to find the argument that will tip the scales. For you, the interest will be not having to pay the prepayment fees and the guarantee fees. On the other hand, if the bank does not agree to the renegotiation, you can always turn to another establishment. The additional expenses will amount to a maximum of 4.5% of the loan amount.
Having your home loan redeemed by an outside organization involves the early repayment of the debt with the original bank. The penalties generated by this early repayment correspond to 3% of the capital remaining due or to 6 months of interest at most. Note that it is possible to get rid of these penalties, in particular, if the initial contract provides that no early repayment fees will be levied. However, this is not common. However, it is possible to remove the penalty in the event of a change of place of work, death or involuntary cessation of work.
On the other hand, there are administrative fees, the amount of which is 150 euros on average or represents 1% of the capital remaining due. But depending on the redemption conditions, the new organization will be more inclined to exempt you from these fees. For example, he will waive the application fees if you agree to have your bank account domiciled with him. Finally, there are the guarantee costs made up of the taking out of the mortgage and the release or contributions to the mutual guarantee fund. These expenses will be between 1 and 5% of the remaining capital depending on the chosen guarantee.
