Spaargids.beThinking about taking out a loan to pay a major expense? Be sure to check whether you can reclaim the part of your home loan that has already been repaid. It can save you tens of dollars. Spaargids.be explains how it works.
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By Johan Van Geyte, in collaboration with Spaargids.be
Latest update:
10:00
Like most real estate owners, have you taken out a loan for the purchase or construction of your home? Then that might have been a mortgage loan, whereby you pledged the house. The bank was given the right to sell the property if you did not pay off the loan according to the agreements in order to get its money back with the proceeds of the sale.
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This guarantee, the mortgage, must be recorded by a notary in an official deed, which is also registered afterwards. Since 1992, this deposit is immediately valid for 30 years. It does not matter that the original loan for which you pledged the house, for example, only ran for 10 or 20 years.
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Taking out a mortgage is therefore not cheap. If you want a mortgage loan of 150,000 euros, you should immediately count on around 4,700 euros in costs for the notary and registration.
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Take out a cheap mortgage loan? See here which interest rates other buyers negotiated
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Cheaper loan
Fortunately, the mortgage also has advantages. Firstly, the guarantee allows you to borrow more cheaply than with a loan without a mortgage. After all, the bank keeps a strong guarantee on repayment.
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An additional advantage is that the guarantee is linked to a real estate and not to a specific loan. It remains in effect even if the credit for which it was initially taken has been partially or fully repaid. This offers possibilities to re-borrow the capital of the original loan that you have already repaid without the borrower having to provide a new guarantee. We call that a re-recording.
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Such re-withdrawal usually benefits from a lower rate. An example makes a lot clear. If you want to borrow 25,000 euros over 60 months for a renovation, then you pay 444.45 euros per month via classic financing without additional guarantee with a renovation loan at 2.60% for five years. On top of your borrowed capital, you eventually pay off 1,667 euros in interest. If you opt for a mortgage loan at 1.80%, you will pay off 435.85 euros each time for 60 months, which means that on top of your capital you cough up another 1,151 euros in interest. The difference after 60 months is 516 euros.
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File costs
Keep in mind that with a re-withdrawal you borrow money at the current rates of the mortgage loans and therefore not at the rates of your old mortgage loan. Finally, do not forget that banks do not charge new costs for establishing a guarantee in the event of a re-instatement, since no new mortgage has to be registered and you therefore do not have to go to the notary again, but that they may charge file costs. bring. They can go up to 500 euros. You then have to deduct this from your potential savings in interest.
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It is therefore important to always make a comparison between classic financing and a reinstatement of your old loan.
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Please note: the bank is not obliged to allow you a reinstatement. Not even with a solid guarantee such as a mortgage, because the foreclosure is only a last resort for the institution if it wants its money back.
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Is a re-recording interesting for you? Check here how much interest you have to pay on a new mortgage loan.
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