When purchasing a property, the borrower selects a mortgage that suits their repayment capacity, age, property price, and other factors. Our fast-paced lives mean that our needs evolve, incomes change, property values fluctuate, and often, the interest rates and indices linked to the loan do too. Consequently, the monthly repayments on the original loan may also vary.
It is highly recommended to ensure that the loan taken out in the past still fits the borrower’s current situation, even after several years. There is no need to stay locked into a loan that no longer suits your needs.
What is the solution?
The reassessment of the loan.
Here are some important elements to know about mortgage reassessment:
- Reassessment consists of taking out a new loan to replace an existing one.
- It is possible to reassess with the original bank or a different one.
- You can reassess the entire loan or just one of the loan products.
- Reassessment can be done multiple times if justified.
- The reassessment process is not complicated: it requires reviewing the borrower’s current repayment capacity, evaluating interest rates and loan products, and determining whether reassessment is beneficial.
- Costs associated with reassessment include early repayment penalties of the previous loan, sometimes an appraisal, legal fees for registering the new loan, and possibly fees for a mortgage consultant to help choose the most suitable product.
Why is it beneficial to reassess?
- Reducing the overall cost of the loan due to lower interest rates.
- Shortening or extending the loan term.
- Decreasing or increasing monthly repayments.
Is it worth checking? There’s nothing to lose.
Request a balance statement for the repayment of the current loan, and a professional can assess whether better loan conditions are available or whether more suitable terms for your current needs can be negotiated.
