For many property owners, the time eventually comes when they need to consider refinancing or follow-up financing for their mortgage. This could be due to the end of the fixed interest period or the desire to benefit from more favorable interest rates. Here’s what to keep in mind and how to make the best decisions for your financing.

What is Refinancing?

Refinancing means replacing an existing loan with a new one. The primary reason for refinancing is often the opportunity to take advantage of lower interest rates, thereby reducing the overall cost of financing.

What is Follow-Up Financing?

Follow-up financing, also known as a loan extension, is the continuation of financing after the fixed interest period of the existing loan has expired. This can involve negotiating a new interest rate with the current bank or signing a completely new loan agreement with another bank.

Tips for Successful Refinancing and Follow-Up Financing

• Start Early: Begin researching and comparing different offers about a year before the end of your fixed interest period.

• Compare Terms: Use online comparison tools and request personalized offers from multiple banks. Pay attention not only to the interest rate but also to other conditions, such as options for extra payments.

• Negotiate with Your Bank: Your current bank is interested in keeping you as a customer and may be willing to adjust its terms to remain competitive.

• Consider Costs: Refinancing can involve costs, such as prepayment penalties or notary fees. Include these costs in your decision-making process.

• Think Long-Term: Choose the fixed interest period based on your personal situation and future expectations. A longer fixed interest period offers security but often comes with slightly higher interest rates.

• Seek Professional Advice: An independent financial advisor can help you find the best option for your situation and understand the nuances of different offers.