Tips to renegotiate your home loan

What if it was an opportunity to renegotiate your mortgage?

Historically low rates

At the end of 2011, the average rate of a fixed mortgage over 20 years was 4.3%. Today, it oscillates between 1.67 and 2% according to the financial organizations. It is therefore a unique opportunity to renegotiate your loan and thus achieve substantial savings, reducing the amount of your monthly payment or the duration of your credit.

Ensuring the real gain of renegotiation

Renegotiating is not advantageous in all cases. Before starting a new application for credit, think about the issues. For a refinancing to be really interesting, the repayment term of the credit must be at least a minimum of 10 years .

It is also preferable that the annual rate difference be at least 1% between your current rate and the one you expect. In this context, be sure to compare identical products. If you subscribed to a fixed rate at the time, confront it at a current fixed rate.

Evaluate refinancing costs

Mortgage refinancing entails significant ancillary costs. To judge the interest of refinancing, compare the total cost of your current loan with that of the new credit. It is also important to evaluate the cost of adjusting the outstanding balance insurance .

Different elements must be taken into account when calculating the refinancing price :

  • re-employment allowance equivalent to three months of interest on the capital to be repaid;
  • a show of hands , related to the removal of the existing mortgage;
  • costs of the new mortgage : notary fees, deed, mortgage subscription rights and registration fees;
  • cost of adjustment of the outstanding balance insurance ;
  • possible fees .

Consult your banker and compare the offers

Before you go through all the banks to find the lowest rate on the market, start by negotiating with your lender . In the majority of cases, he can make a commercial gesture that will lower the rate of your loan by limiting expenses.

Do not hesitate to analyze the rates of major banks through a comparator to get an idea of the market offer and better negotiate. In any case, do not close the door to a change of organism if it is more advantageous for you.