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Refinancing mortgage
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You refinance your mortgage to benefit from a lower interest rate and/or to exchange your current mortgage type for a different one. Mortgage rates have risen sharply since the beginning of 2022, but refinancing your mortgage can still yield benefits. We can calculate whether refinancing is a sensible choice for you.
When taking out a mortgage, you often agree on a fixed interest rate with the lender for a specific period. Within this period, it may turn out that it is wise to make a different choice than agreed. By refinancing, you avoid being stuck with a contract that no longer suits you. Do not stick with a mortgage for the wrong reasons if you can arrange things better with a new mortgage.
Refinancing your mortgage? Then you probably have a lot of questions:
- What are the benefits of refinancing my mortgage?
- Can I refinance despite a penalty or remaining fixed-rate period?
- How do I know if now is the right time?
In a personal meeting, we would be happy to answer all these questions — and together we will assess whether refinancing is financially beneficial for you.
Often, more is possible than you think
We have already had the privilege of helping many people. In doing so, we always provide tailor-made solutions for every unique situation. We specialize in the following special situations:
- Medical resident
- PhD candidate / researcher
- Starting entrepreneurs
- Family bank mortgage
- Generation mortgage
- Guarantee and co-debtorship
- Starter loan
- From renting to buying
Let us know if you would like to know more about the matters mentioned above; we are happy to help.
Calculate it yourself
Would you like an indication of the possibilities? Use the tool below: Please note: the tool is indicative. Sometimes more is possible than you think. Het Florijnhuys provides custom solutions. We would be happy to tell you more.
Calculate bridging mortgage
Interested in a no-obligation introduction?
You can always get to know us in an informal, no-obligation way. This can take place at our office, at your home, or at your business. Meeting by phone or online via video call is also possible.
During a free consultation, we can discuss the feasibility of your wishes together. We can also provide an initial indication of the maximum mortgage and the associated monthly payments.
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The Florijnhuys is happy to help you!
Looking for financial advice for your own home or investment property? Call 050 – 211 08 52 or fill out our contact form via the button below.
What does refinancing a mortgage entail?
When refinancing your mortgage, you take out a new mortgage, and with this new mortgage, you pay off the existing mortgage debt. When refinancing, you are essentially breaking the contract with your current bank. For example, you took out a mortgage 8 years ago with a fixed interest rate for 10 years. You often choose to refinance when it is wiser for financial reasons to part ways with your current mortgage. For instance, you may be paying a much too high interest rate on your current mortgage. Or you currently have a large portion of the mortgage interest-only, and you would prefer a mortgage type where you make repayments. When refinancing, you often have to pay a penalty interest.
Did you know that you do not pay a penalty interest when your fixed-rate period has ended? You can then switch to a cheaper mortgage with better terms penalty-free.
Why refinance a mortgage?
You only choose to refinance if it benefits you. Our mortgage advisors can calculate the benefits of refinancing during a no-obligation consultation. There are several reasons for refinancing your mortgage. The most important reason is benefiting from low mortgage interest rates compared to your current mortgage. Additionally, you can lock in the low interest rate for a long period immediately. For example, you fix the interest rate for the entire remaining term.
By refinancing, you can also significantly reduce your monthly payments. There are various ways to achieve this goal. In some cases, it is possible to lower monthly payments by hundreds of euros per month.
Is refinancing worthwhile for you? You can calculate it for yourself in a few steps on our website.
How can I refinance my current mortgage?
Refinancing your mortgage means taking out a new mortgage. The new lender will pay off your current mortgage. We will request documents from you regarding, for example, the level of your income, the house will be revalued, and you will also need to visit the notary again to finalize the new mortgage. This entails costs, but if the benefits of refinancing outweigh the disadvantages, you will choose to refinance your mortgage. We will take care of everything that needs to be arranged for you.
Penalty interest on refinancing
When taking out a mortgage, you agree on a fixed interest rate with the lender for a specific period. This is called the fixed-rate period. You will not be affected by a rise in mortgage rates, and you will no longer benefit from a fall in interest rates. Fixing the mortgage interest rate gives you the certainty of fixed monthly payments. If you break the fixed-rate period, the lender will charge you a penalty interest. This only happens if the bank incurs a loss due to breaking the contract. We take this penalty interest into account when considering whether refinancing is wise. Therefore, you should only refinance if the benefits outweigh the costs.
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Useful tips for refinancing a mortgage
Are you looking for a mortgage with the lowest monthly payments for the purchase of your own home? Or are you looking for a buy-to-let mortgage for the purchase of an investment property?
Frequently asked questions about buying a house
The amount of the penalty interest depends on several factors. The penalty interest is high if the difference between your interest rate and current mortgage rates is large. The amount of the penalty interest also depends on the remaining term of your current fixed-rate period. With only a few months remaining, the penalty interest will be lower than with a remaining term of several years.
Refinancing your mortgage is not always beneficial. Therefore, make an appointment with an independent mortgage advisor to have them calculate whether refinancing is worthwhile for you. After this no-obligation consultation, you will know how much you can save and what costs to expect for refinancing your mortgage.
You can refinance your mortgage years before the end date of your fixed-rate period. However, a long period before the end date of the fixed-rate period can result in you paying a high penalty interest rate when refinancing your mortgage.
Mortgage rates have risen sharply in recent months. Despite the higher rates, refinancing your mortgage can often still be worthwhile, especially if your current interest rate is higher than current rates. An additional benefit of refinancing is that you can lock in a relatively low rate for a long period.
Upon reaching the end date of the fixed-rate period, you can switch to another lender without paying a penalty interest. You can also make penalty-free repayments annually. Many mortgages stipulate that you can make additional penalty-free repayments of between 10% and 20% of the original mortgage debt.
The value of your home must be sufficient to refinance your mortgage. There are two ways to determine if the house has sufficient value: by having the house appraised or by using a recent WOZ assessment. Lenders will accept a WOZ assessment if your mortgage is less than 60% of the WOZ value. There are also banks that always require an appraisal.
Buying a house without your own funds is no longer possible. Since 2018, rules have been in place limiting the amount you can borrow to no more than 100% of the property's value. This means you are personally responsible for paying additional costs, such as closing costs. The exact amount you need for your new home depends on your personal situation and whether you are looking at an existing house or a new-build property.
The Florijnhuys is happy to help you!
Looking for financial advice for your own home or investment property? Call 050 – 211 08 52 or fill out our contact form via the button below.
