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Retaking Mortgage Credit vs. Classic Finance: This is How You Borrow Cheaper |  MyGuide

Retaking Mortgage Credit vs. Classic Finance: This is How You Borrow Cheaper | MyGuide

Spaargids.beAre you thinking of getting a loan to pay big expenses? Make sure to check if you can get back the portion of your home loan that has already been paid off. It can save you tens of dollars. Explains how it works.

Written by Johan van Getty, in association with

Last updated:
10 o’clock

Like most landlords, have you taken out a loan to buy or build your home? So this could be a mortgage, where you pledged to buy the house. The bank was given the right to sell the property if you did not repay the loan in accordance with the agreements in order to recover its money from the proceeds of the sale.

This guarantee, the mortgage, must be recorded by a notary in an official deed, which is also recorded afterwards. Since 1992, this deposit is immediately valid for 30 years. It doesn’t matter that the original loan you pledged the house for, for example, only lasted 10 or 20 years.

So getting a mortgage is not cheap. If you want to get a mortgage of 150,000 euros, you should immediately rely on about 4,700 euros in notary and registration costs.

Getting a cheap mortgage? See here the interest rates negotiated by other buyers

Cheaper loan

Fortunately, the mortgage also has advantages. First, collateral allows you to borrow at a cheaper rate than a loan without a mortgage. After all, the bank maintains a strong guarantee on repayment.

An additional advantage is that the collateral is tied to a property and not to a specific loan. They remain in effect even if the credit initially obtained is partially or fully repaid. This provides possibilities to re-borrow the principal of the original loan that you have already repaid without the borrower having to provide a new guarantee. We call that re-registration.

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Re-withdrawals usually benefit from a lower rate. An example explains a lot. If you want to borrow €25,000 over 60 months for renewal, you pay €444.45 per month via classic financing without additional collateral with a 2.60% renewal loan for five years. On top of the borrowed capital, you will eventually pay 1,667 euros in interest. If you choose to take out a mortgage at 1.80%, you will pay 435.85 euros each time for 60 months, which means that in addition to your capital, you can get another 1151 euros in interest. The difference after 60 months is 516 euros.

File costs

Keep in mind that with a redraw, you are borrowing money at the current mortgage loan rates, and therefore not at the old mortgage loan rates. Finally, do not forget that the banks do not charge new costs for the creation of the guarantee in the case of re-instalment, since it is not necessary to register a new mortgage, and therefore you do not have to go to the notary again, but they may do the freight file costs. It can be up to 500 euros. Then you have to deduct this from your potential savings in interest.

So it is always important to make a comparison between classic financing and returning your old loan.

Please note: The Bank is not obligated to allow you to return to your job. Not even with a solid security like a mortgage, because foreclosure is only the institution’s last resort if it wants to get its money back.

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Is re-registration fun for you? Check here how much interest you have to pay on your new mortgage loan

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