Why should I refinance my mortgage?
In some cases, refinancing can benefit your existing financial situation. For example, you can reduce your interest rate and monthly costs. Imagine you took a loan for 30 years with a higher interest rate. Now you can refinance your mortgage to 25 years with a lower interest rate.
However, refinancing is not free. You must pay the penalty to your mortgage lender because you decided to leave the deal earlier. The amount varies per lender because each lender offers different conditions.
Why is refinancing a bad idea?
Refinancing your existing mortgage can be expensive. First, you must pay the penalty to your mortgage lender because you decided to leave the deal before the fixed-rate term ends.
If you fixed your mortgage interest rate for ten years and decide to refinance after three years, you still have seven years remaining. Your mortgage lender could ask you to pay the remaining interest rate back.
Secondly, you must pay mortgage-related fees for your new mortgage, including an appraiser, the notary, and other mortgage closing fees.
So, it would be best to weigh the pros and cons of refinancing options in the Netherlands. Do you need help? Contact us to get up to date information about mortgage lenders and interest rates.