Save on your monthly costs by transferring your loan or mortgage
Taking out a mortgage or a loan can have major consequences for your monthly expenses. Especially a mortgage is often the largest amount you have to pay monthly fixed costs. But also a loan, depending on the size and type of loan can take off much of your monthly budget.
That is why many people also look around at other creditors to see if it is possible to transfer their mortgage or loan. With the transfer of your mortgage or loan you can save a lot of money every month.
But there are also disadvantages and you have to let yourself outweigh the benefits. Only then do you know whether it pays to transfer your mortgage or loan.
Exchanging a loan
Did you take out a loan at a time when the interest was still relatively high? This is the main reason why people want to switch their loans. With lower interest rates you save directly on your monthly expenses. But there are several advantages:
- If you have multiple loans, it pays to combine them into one loan.
- The possibility to reduce your monthly costs by paying extra.
- The possibility to include loans with a backlog in a new loan.
A disadvantage could be that the lender has included a penalty clause in the policy to discourage disconnection. So you have to check very carefully whether the costs and penalties that come with the transfer, outweigh the interest rate cut.
A loan transfer is usually only advantageous if you pay a significantly high interest rate.
You go to a mortgage for a longer period. Interest charges are also very important for a mortgage. With a few percent less interest you can already reduce your monthly expenses by tens of euros. But here too, there are several advantages to a mortgage:
- Creating additional capital through lower interest rates.
- A better fixed-rate period, so that your interest rate is longer.
- Tax deductibility of the costs of switching.
Also with a mortgage transfer it is very common to pay penalty interest. This penalty interest can increase considerably. In addition, all sorts of costs also come into the process of switching.
If you do not finance the costs then this saves a lot. You have to check carefully whether the penalty interest outweighs the reduced interest. It is true that penalty interest and costs are tax deductible.
Crossing a mortgage is the most advantageous if the period of the fixed-rate period is due.