Nieuws | 6 questions sur les prêts immobiliers

How to refinance your mortgage loan?

Mortgage rates are decreasing, and it’s even possible that we will see loans with an interest rate of 2.5%. Is it wise to renegotiate your mortgage loan? Several factors play a role here.

The main condition to make refinancing profitable is that you still have at least ten years left to repay the loan, and that the difference between your current interest rate and the new offer is at least 1%. It’s important to always start negotiating with your current bank before looking at alternatives. If they are willing to lower the interest rate, you can save on file fees and avoid high costs like reinvestment fees. If your bank refuses or offers insufficient improvement, consider refinancing with an external party.

Be aware that, in addition to reinvestment fees, there may be other significant costs, such as cancellation fees for the old mortgage, costs for establishing a new mortgage, notary fees, and insurance. You will only recover these costs if the new loan agreement is much more advantageous. Keep in mind that the interest rate alone is not sufficient; it’s important to always evaluate the total costs of refinancing. Make sure the interest rate reduction sufficiently covers the additional costs. Additionally, you should know that the tax authorities do not view refinancing as a new loan, but as an extension of your existing loan. If you already enjoy tax benefits, these will continue to apply in all regions when refinancing the loan.

How to save costs by planning works in advance?

By planning renovation works at the time of applying for a mortgage loan, you can save additional costs. A low monthly payment may seem attractive, but in the long run, this can be much more expensive.

Imagine: with a mortgage loan of €250,000 over 20 years, the monthly payment is €1,660. If you include the renovation costs, for example €50,000 out of the €250,000, in the original loan, the monthly payment remains €1,660. But if you do not include these costs in the loan amount from the start, you will need to take out a second loan, which incurs additional costs. Taking out an additional mortgage loan after the purchase means new file fees and, depending on the situation and the ratio, possibly a new mortgage deed at the notary.

A consumer credit can be an alternative, as there are no notary or file fees associated with it. In the case of urgent works, where no prior plan or offer has been included in the mortgage, the borrower can choose a personal loan. This loan is limited to a term of 10 years and a maximum amount of €50,000. This results in higher monthly payments: in addition to the monthly payment of the original mortgage loan (€1,328 for €200,000), you must also repay the personal loan, which means an additional monthly payment of €661. This adds up to a total monthly repayment of €1,989 for the first 10 years. This higher amount can weigh heavily on your budget, and furthermore, this is only possible if the bank agrees with your repayment capacity.

How to benefit from a capital reuse?

Do you have an existing or paid-off mortgage loan? Then it is possible to reuse the capital you have already repaid for other projects, without the need for new notary fees or a new mortgage registration. This is called the principle of capital reuse, a practical and cost-saving solution for carrying out works or purchasing new property. In this option, you can borrow an amount equal to the capital you have already repaid on your existing loan, using the same mortgage registration. For example, if you have already repaid €100,000 on a €300,000 loan, you can borrow that amount again. The applicable conditions (interest rate, term, etc.) will be determined at the time of reuse, not based on your original loan, which can be beneficial if interest rates are decreasing.

Moreover, a capital reuse can also be requested once the loan has been fully repaid, as long as the mortgage registration (for up to 30 years) is still valid. This system has two main advantages. First, it is cheaper because no new notary fees or mortgage registrations are required, only file fees from the bank, which are a maximum of €350. Second, it is more flexible because you can choose an adjusted term, as long as it remains within the validity period of the mortgage (30 years).

What are the pros and cons of a mortgage mandate?

When you take out a mortgage loan, the bank requires guarantees to protect itself against non-payment. But in addition to the traditional mortgage, there is an alternative: the mortgage mandate or, in other words, the mortgage power of attorney.

The mortgage mandate gives the bank the right to establish a mortgage on your property at a later time, if necessary. As long as this mortgage is not activated, the costs remain limited because this mandate is not registered with the Legal Security Office. This prevents registration costs, which can be quite substantial with a traditional mortgage.

The pros and cons? The biggest advantage of a mortgage mandate is the lower cost. For a loan of €200,000, the cost of a mandate is approximately €1,250, compared to €5,500 for a traditional mortgage. This is beneficial for the borrower, although the mandate is usually only granted for part of the loan.

Often, a combination of a mortgage mandate and a mortgage registration is used, with part of the loan falling under the mandate and another part under a traditional mortgage. However, there are some risks associated with the mandate in case of financial difficulties. The bank may decide to convert the mandate into a mortgage, meaning you will still have to pay registration costs. Additionally, the mandate does not offer any tax benefits, except for the part of the loan covered by the traditional mortgage registration.

Plus Magazine Nederlands (2025, 31 januari). 6 vragen over woonkredieten. CIB community. Geraadpleegd op (8 februari 2025)