Everything you need to know about renewing your mortgage
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If your mortgage is coming to an end, you may be thinking about renewing it. This event is a must for many individuals. To avoid unpleasant surprises, there are a few good reflexes to be aware of. In particular, renegotiating your mortgage with your advisor and comparing it with other offers are steps you shouldn't neglect. They can save you a lot of money.
When should you renew your mortgage?
Renewing your mortgage at term
Most bank customers wait until the end of their mortgage term to renew. In fact, if the conditions obtained at the time of signing match your expectations, it's in your best interest to see your contract through to the end.
This is also reassuring if you've opted for a fixed-rate mortgage. You actually know what charges you'll have to pay, over a defined term.
Remember that, in general, a mortgage loan commits you for a period of 1 to 10 years. Some organizations may also offer you a 15-year spread, depending on your profile.
Anticipating mortgage renewal
You can also consider what's known as early termination. This involves putting an end to your current mortgage, before the term date stipulated in the contract. Please note that with most banks, you will have to pay compensation. Don't hesitate to consult your contract to find out how much.
It should also be remembered that some banks, such as BCN, offer a mortgage without penalties in the event of early termination. This is the principle of the Hypoflex offer, proposed by this bank.
If the rate offered for your next l'hypothèque is more advantageous than for the current mortgage, it's possible that even with financial penalties, you'll make savings!
When do you start negotiating your mortgage?
You can start negotiating the renewal of your mortgage a few months before its term or before your early termination. This gives you time to compare offers and negotiate with several different parties.
Choosing your mortgage model
Just as when you took out your first mortgage, you'll need to choose between several formulas. With a fixed-rate mortgage, you're sure to be able to calculate your charges, right up to the term of your next mortgage. It remains particularly suitable when rates are low at the time of your renewal.
You can also opt for a variable-rate mortgage. SARON's mortgage is an alternative where these two solutions meet.
Do you have to change banks to renew your hsymortgage?
Do mortgage conditions remain the same?
When you renew a mortgage, be aware that conditions can change. The bank may offer you a new rate, adapted to the duration of your mortgage or to your current profile. In some cases, the bank may not be able to maintain the conditions originally proposed. These include rates, which tend to change from one year to the next. At the moment, the trend is upwards.
Watch out for the end of special offers
When you first take out a mortgage with a bank, you may benefit from special offers. These are in fact promotions put in place to persuade you to take out a mortgage with a bank you may not have been a customer of before.
When you renew, this offer may come to an end. It is imperative that you make sure that the new terms of your commitment suit you.
Competing with banks
Even if you want to continue your mortgage with the same bank, a competitive bidding process can be useful. By renegotiating your mortgage, backed by offers from other organizations, you may be able to get better terms. It also allows you to take a look at what the competition can offer you.
Compare mortgage offers
So here you are, looking for the best mortgage, to renew your loan. In particular, you can compare the interest rates on offer. We advise you not to settle for simulations carried out using the banks' online calculators.
In fact, by requesting quotes, you can compare all the contracts offered to you, with the associated guarantees. What's more, the calculator gives you an indicative rate, which is not necessarily suited to your profile.
Finally, don't hesitate to turn to online mortgages. The new players available on this market can offer attractive rates.
Alternatives to mortgage renewal
Mortgage increase
Simply renewing your mortgage isn't always enough. For example, you may need to renovate or convert your home. Renewing your mortgage is an ideal time to discuss such projects with your bank advisor.
Adapting your mortgage
You can choose to adapt your mortgage. If your financial conditions have changed, you can extend or shorten the term of your mortgage. You can also opt for a different mortgage strategy, between direct and indirect repayment.
Most of the time, mortgage adaptation is requested when family changes take place. In particular, if your children have left home and are no longer financially dependent on you, you may request an adaptation. This is also the case if you've gained or lost income.
Choosing the right contacts
Renewing your mortgage is therefore a key step, for which you should be properly accompanied. Calling in financial experts can be a good idea, to avoid making costly mistakes. For example, by calling on the services of advisors, you can avoid having to negotiate higher charges. You can also open your horizons to new banking organizations, which may offer the mortgage solutions that suit you.
Don't hesitate to contact us, to get help from our firm, to renew your mortgage, with the best possible rate and conditions.
Updated on: 31.01.2024Written by Valery ChantepyHead of mortgage department at CompareaTo learn more about our team click here.