Mortgage interest rates are still very low, but could go up quickly. To lower the total cost of your loan by a few thousand USD, there is still time to renegotiate it. Here are our tips for optimizing the operation, as well as the formalities to accomplish.
What conditions to optimize savings?
Bond rates are currently starting to rise again, and the impact on real estate rates should soon be felt. In addition, the process is relatively long. Also, if you plan to embark on a renegotiation or buy back credits, it is best to get started as soon as possible.
However, this financial arrangement is not necessarily interesting, because it involves various costs such as application fees, compensation for early repayment of the old loan, and the transfer of collateral to the new. To take advantage of this, the spread between the rate on your original loan and the new one must exceed 0.7%.
For reference, banks now offer 1.5% to 1.6% over 20 years, 1 point more than in 2015. Regarding the repurchase of loans in particular, the capital remaining due must be at least 70,000 USD for the process to be profitable.
Finally, the loan to be renegotiated must be fairly recent, the share of interest in each monthly payment being the highest during the first years of repayment.
Which address ?
The simplest and fastest solution is to contact your banker to request a downward revision of the current rate on your mortgage. Good customers have a good chance of winning their case, but it also happens that in return for such a commercial gesture, the bank asks you for a long-term commitment, or requires the subscription to life insurance. , an ELP or another product.
If his proposal is not attractive enough, do not hesitate to play the competition. Comparison and simulation tools are available free online. Otherwise, a broker can assist you in finding the best offer and in all the administrative formalities.