Refinancing a mortgage can be worth considering in various situations. For example, consider moving to a new home. Refinancing a mortgage is also interesting if interest rates have fallen significantly in recent years. You may benefit from lower monthly payments if you decide to transfer the mortgage to another mortgage lender. Did you take out the mortgage at a very low-interest rate? In that case, you may want to take your mortgage with you instead of transferring it. You can read more about the advantages that transferring a mortgage can entail.
How a mortgage transfer works
Transferring a mortgage actually means nothing more than paying off the current mortgage with a new mortgage to be taken out. That new mortgage to be taken out is logically taken out on more favorable terms than the conditions of your current mortgage (otherwise you would not transfer). With these conditions, do not only think of the interest that you pay monthly, but also, for example, the possibility to pay off the mortgage faster without penalty. You may expect a financial windfall in the coming years, so that accelerated repayment of the mortgage has become an option.
Lower monthly costs after refinancing a mortgage
For many people, the main reason for considering refinancing a mortgage is that they can benefit from lower monthly payments. The new mortgage is taken out at a lower interest rate, so you pay less. Please note, the difference in interest is not directly the financial advantage that the transfer of the mortgage gives you. From this difference you should deduct the fine you pay to your current mortgage lender. Is the resulting negative? In that case, refinancing a mortgage will cost you more than it will yield you. A mortgage advisor can calculate for you whether mortgage refinancing is interesting.
Favorable conditions with new mortgage lender
You have already read that there are not only financial advantages to a mortgage transfer. It can also lead to you taking advantage of favorable conditions. Think of the option to paying off your mortgage faster without having to pay a high fine. A mortgage advisor can walk you through the conditions of your existing and new mortgage lender to determine what is the most favorable option for you.