Is the refinancing of your mortgage loan still interesting ?

Is the refinancing of your mortgage loan still interesting ?

When should you consider refinancing your mortgage loan? There is no single answer to this question. It all depends on your situation. After all, you may consider reviewing your mortgage and taking out a refinance loan for various reasons. Here is an overview of 2023 with 11 possible reasons to refinance!

An observation: increase in mortgage interest rates in 2023

While we still had extremely low mortgage interest rates at the start of 2022, the market has dramatically shifted since the summer of 2022. Residential loan interest rates have started to rise, and by the end of 2022, interest rates will have doubled.

The rise in interest rates is due to many factors:

  • The European Central Bank ends its financial support
  • Increase in inflation
  • The energy crisis
  • The war between Ukraine and Russia
Is the refinancing of your mortgage loan still interesting ?

Is it too late to refinance your mortgage now?

Not. Despite the rise in interest rates, it may be worth reviewing your loan in 2023. However, there is no golden rule in this area. Every situation is different. Each loan file is unique.

And what’s more, every euro now counts. Everyone is looking more and more at their monthly budget. Below are 11 reasons why it may be worth considering refinancing your mortgage.

Refinancing your mortgage loan: you will carry out work in the house.

Given the evolution of the legislation and the obligation to make their home CO2 neutral, many Belgians are already deciding to carry out renovation work. The main motivation is not the legislation itself but the skyrocketing energy bills. These cost a handful of money. And the Belgians try to save in every possible way. This can be done by investing in renovations.

How can you fund this work?

1. Using a capital withdrawal

You ask your current banker to make a capital withdrawal. If you have always made regular payments, the bank will probably allow the withdrawal. But you should know that a re-borrowing is equivalent to a new loan and, therefore, a new monthly charge. In addition to the current monthly charge. If you’re not careful, you’ll see your financial room for maneuver shrinking quickly, and before you know it, you’ll be out of luck.

2. Refinancing your existing mortgage loan with another bank

This is why many Belgians consider refinancing their existing mortgage loan with an additional loan for the works to be carried out. This way, they can choose a new (longer) term for their new loan, keeping the monthly charge affordable and comfortable. You, therefore, kill two birds with one stone by paying only one monthly payment. 

Refinance your mortgage loan to reduce the monthly charge.

You can also have your mortgage loan refinanced if the total monthly charge begins to become too heavy. A credit broker like Credishop offers you tailor-made proposals and solutions you cannot find elsewhere.

For example, this will be the case if you have several loans or credits in progress, such as a car loan or a personal loan. The total amount you will have to repay each month is gradually becoming untenable, and you need a review of all your loans and credits. In such a case, consolidating or rearranging your credits will be a solution to obtain a lower monthly charge.

The monthly charge will decrease by opting for a longer term for your new mortgage. You will, so to speak, spread out the repayment of the capital. You may pay more interest in the long term, but the most important thing for you will be to obtain a lower monthly chargeā€¦

Selling your home and buying a new one: refinancing your mortgage loan by adding a bridge loan

Recently, we have also noticed that many people in their 50s (or older) are selling their homes to buy a newly built apartment. The children have left the house. The house begins to require too much maintenance and/or investment. People want to live more centrally, close to shops and public transport.

They put their house up for sale and buy a new apartment in a village or town center. If there is still a mortgage loan, they refinance it to include the budget for the new construction and the bridge loan in a new mortgage simultaneously.

Refinance your mortgage loan to buy a second property abroad.

Despite the difficult economic times of 2022, several people have resorted to mortgage refinancing to borrow extra money to buy a second property abroad. Spain and Portugal are the most popular countries.

This second residence is then bought to be occupied, but generally also to earn additional income by renting it out to other tourists. Well seen, of course. Please contact us if you also want to buy a second residence abroad. We will be happy to help you.

Refinancing Your Mortgage Because You’ve Been Blacklisted

But the crisis has also affected many people whose mortgages are in default and who risk losing their homes.

According to figures from the National Bank of Belgium, from November 2022, there have been 21,973 defaulted loans for mortgage credit. Accounting for an outstanding capital of nearly 877 million euros. Although this is a decrease from the same period in 2021, it still means that around 22,000 households are “blacklisted.” Contact us immediately if you are blacklisted and do not want to lose your accommodation. We are sure to find a solution. 

Refinancing your mortgage loan in the event of a divorce

According to the latest figures from Stabel, more than 22,000 marriages will be dissolved by 2021. This means that 4 out of 10 marriages will end in divorce at term. The number of the latter who are also owners is unknown or communicated. What we see in practice is that people are still contacting us to find a solution to refinance their mortgage and fund the buyout payment. Whether or not they were married in this process doesn’t matter. There is a divorce and an asset that one of the parties wants to keep. If you are in divorce proceedings, 

Refinancing your mortgage loan: modify the duration of your mortgage

Every euro counts, becoming more important than ever for many households. The future looked different, and many Belgians followed their bank’s reasoning when taking out their home loan that a shorter term for your mortgage was more attractive, simply because this way, you pay less interest in total. And that’s true. But in the current context, many more Belgians are looking at their monthly budget.

This is why we are still seeing a resurgence in refinancing in the event of a financial setback or (temporary) loss of income. The existing monthly charge then becomes too heavy. Now is a good time to consider a refinance loan and extend the loan term.

Refinancing your mortgage loan: the chosen formula no longer satisfies you

You chose a particular formula when you took out your current home loan. This choice was perhaps the ideal formula at the time. Your life may have changed so much that this formula no longer meets your expectations.

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You had opted for a fixed interest rate when you took out the mortgage, and you are only now realizing the advantages of a variable rate. Or conversely, you have a variable interest rate but now want to provide some security with a fixed rate.

Not all banks will want to follow you to revise your loan formula. In addition, for the bank, it also means a lot of administrative work for a loan structured differently. For the bank, this means a loss offset by a higher interest rate due to internal refinancing. Thus, you may be forced to turn to an “external” refinancing of your mortgage loan.

No longer being satisfied with the bank’s services: refinancing your mortgage loan!

A refinance loan can also be based on emotional reasons. You are no longer satisfied with the services of your current bank: the bank manager no longer works there and has been transferred to another branch, or, even worse, the branch no longer exists. You have to go to another city or make a distant move and an appointment with an unknown person.

You decide to leave with all your products. You are convinced of the need to review your mortgage loan. As an independent credit intermediary, we always take time for our clients.

Refinancing your mortgage loan because you want to personalize it

The interest rate is only part of a home loan. This becomes all the more clear when looking for personalization. This personalization usually occurs when you expect a large sum in the future through an inheritance, a gift, an open group insurance policy, or a life insurance policy. Then, if a mortgage is still in progress and you wish to reduce your monthly charge, it is best to contact us to see what we can do for you.

For example, the customization could consist of taking over your existing loan in a new loan but dividing the existing credit into two advances: a classic system with fixed monthly payments and a fixed-term credit (bullet). For fixed-term credit, you only pay interest on the capital, which is lower than a conventional repayment. You repay the capital borrowed from this loan in fine with the planned sum.

This type of file requires knowledge and know-how. Our credit specialists will guide you step by step and happily draw up a personalized calculation for you. 

Refinancing your mortgage loan following a change in your situation

Refinancing may also be required in the event of a change in your situation:

  • You have just been made redundant, and you expect payment problems following a drop in your income
  • You are in arrears on your home loan.

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Is the refinancing of your mortgage loan still interesting ?

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