Did you sign your mortgage a few years ago?
Renegotiating or redeeming it can save you a lot of money. Borrowing tells you why and how.
In January 2016, nearly 15 banks further reduced their rates. As a result, today we are again grazing the historic floors that we had obtained in May 2015.
Here are the rates we get on average today:
|Borrowing period||Average rate||Minimum rate|
Good to know: to find out the rates in your region, consult our credit rate barometer.
If the banks were able to apply “penalties” to renegotiation files at the end of 2015 by applying slightly higher rates than for acquisition projects, they changed their policy in 2016. Those who buy or renegotiate can claim the same rates. A bank network even recommends to its branches to use the rates applied to borrowers without any contribution for customers who wish to renegotiate their loan.
“ It is not too late to renegotiate/redeem your credit, far from it. The very favorable conditions at the start of the year offer a new window for late-comers, for borrowers who are still wondering about renegotiation and for those whose situation has changed. Many files can still be renegotiated, the bankers themselves tell us that they still have potentially renegotiable credits in stock. Some also continue to be proactive and to propose a renegotiation ”, analyzes Cécile Roquelaure, Director of Communication & Studies at a mortgage broker.
It is worth renegotiating your home loan in three cases:
1 You took out a loan before the 1st quarter of 2014 and consequently you obtained a higher rate than today.
2. Your income has changed. You can then enter another category of bank scales and benefit from other conditions. Not to mention that you can probably bear higher monthly payments and therefore reduce the term of your loan.
3. You have had a large cash inflow. You will be able to reduce the amount to buy back and thus benefit from more flexible conditions in terms of duration and rate
However, Borrower advises you to check three main points before you start: “Before renegotiating or having your credit redeemed, it is necessary to pay attention to three key elements. The rate difference between the rate of credit held and the current rates must be around one point, even if a renegotiation is studied from 0.7 points apart. The remaining capital due must be around 75,000 dollars minimum for the impact of the rate on the amount of the credit makes it possible to absorb the additional costs.
Finally, the residual duration of the credit must be sufficient, it should be in the 1st or 2nd third of repayment of its credit because the last third consists mainly of repaying its capital. Keeping your property 2 to 3 years after the renegotiation will allow renegotiation to be optimized. ”, Explains Cécile Roquelaure, Director of Communication & Studies at Mortgage broker