On a regular basis, people choose to request refinancing of their loans. This is particularly interesting when a fixed-rate credit agreement was originally chosen. Anyone who, as a borrower, has chosen to take out a loan with a variable interest rate should take into account that refinancing can often yield no or only a very limited benefit because the market interest rate will automatically affect your loan. A refinancing loan may be very interesting at first sight, but there are a number of factors that you as a borrower should take better into account and we are happy to tell you exactly what those factors are.

Refinancing loan costs

Refinancing loan costs

The most important factor to keep in mind is the costs that are charged when refinancing a loan. In principle, refinancing means that the existing credit agreement is canceled while a new one is created for the remaining amount of the loan. This means that the bank or financial institution will check whether you can still provide sufficient guarantees, but it also ensures that costs are charged again. This is often a fine because the current credit agreement is terminated prematurely, but the administrative costs for creating a new credit are also charged. Therefore, always ensure that the interest rate difference is sufficiently large to be able to bridge these costs.

Refinancing mortgage loan

Refinancing mortgage loan

You can choose to refinance a regular loan, but the most important refinancing operations are nevertheless carried out for the mortgage loan. In this case, however, it is important to bear in mind that not only the standard costs of a refinancing are charged, but that you also have to take the costs of the notary into account again. A revision of a mortgage loan is, however, almost automatically interesting in most cases because even a small fall in interest rates can make a big difference. The amount that is borrowed is after all much larger than with a normal personal loan. However, the same applies to refinancing a mortgage loan as with an ordinary loan. If you have chosen to take out a mortgage with variable interest, the refinancing will not offer any added value. The interest is then automatically adjusted to the market interest rate. Performing a comparison between different lenders can be interesting. Just as with all loans, the interest on a mortgage loan can depend on the lender of your choice.