Refinancing your mortgage (transferring your loan to another bank) can bring significant financial benefits for your wallet!
Remember:
- You do not have to wait until 5 years of your currently signed fixed rate will expire in your current bank. You can refinance your loan literally the day after disbursement of your old loan.
- The whole process, from consultations, analysis, processing the refinancing into a new more profitable bank for you and even supporting you in a bank’s branch – it’s 100% free of charge! You pay us literally nothing, and get precisely 1:1 the same offer as if you would visit for example ING, Millennium, mBank’s etc. branches by yourself. The banks have special marketing funds to reward us from successful transfers. So it’s a full win – win for either you and us.
If you have recently signed a mortgage contract with a fixed interest rate for 5 years, refinancing will help you to take advantage of reducing your high interest % rate, monthly payments and the total cost of the loan. There’s no rocket science – we already helped over a hundred of our clients in 2023/2024 since inflation escalated and bank’s rates went wildly skyrocketing.
Even though this process is fast and simple, it requires analysis and understanding of a few key factors. In the following article, I explain when it is worth considering refinancing your mortgage, how the process works, and what benefits it can bring. If you are considering transferring your loan, this guide is for you!
What mortgage refinancing actually is?
Mortgage refinancing involves transferring an existing loan to another bank to obtain better financial terms. This can include:
- Lowering monthly payments – by renegotiating the loan terms, you can reduce the amount of your monthly payments.
- Extending the loan term – a longer repayment period can lower the monthly payment, which is beneficial for your household budget.
- Reducing the total cost of the loan – lower interest rates or margins can significantly decrease the total cost of the loan.
When should you consider refinancing your mortgage?
Refinancing your mortgage can be beneficial in several key situations:
- Changing market conditions – banks regularly update their offers, which may result in better loan conditions than those in your current agreement.
- Payment difficulties – if your mortgage payment becomes too challenging for your household budget, refinancing can help lower the monthly payment by extending the repayment period.
- Consolidating debts – if you have multiple financial obligations, transferring your mortgage can simplify financial management by consolidating all debts into one loan.
Common reasons for refinancing a mortgage
Borrowers often decide to refinance for the following reasons:
How to transfer a mortgage to another bank?
- High fixed rate signed for 5 years period – If your current mortgage has a high fixed interest rate, refinancing will help you take advantage of lower rates available in the market, reducing your monthly payments and the total cost of the loan. Remember, you do not have to wait until 5 years of signed fixed rate will expire in your current bank. You can refinance your loan literally day after disbursement of your old loan.
- Low own contribution payment when signed the mortgage – the original loan may have been more expensive due to a low own contribution (down payment). Refinancing can provide better terms thanks to improved creditworthiness.
- High margin – the loan margin is a fixed component of the interest rate throughout the loan period. A high margin can be a significant burden on the household budget, so reducing it through refinancing can bring additional savings.
The process of transferring a mortgage consists of several steps:
- Analyze offers with a mortgage expert – compare the available offers from banks, considering all additional costs such as fees and commissions.
- Understand all costs – the mortgage expert will check if the early repayment of the current loan involves additional costs, such as early repayment fees, notary fees, property valuation costs, and court fees.
- Submit a loan application – after selecting a specific offer, the expert will help you submit an application for refinancing at the new bank.
- Repay the debt at the current bank – once the new refinancing loan is granted, the funds from this loan will be used to repay the existing obligation.
What documents are needed to refinance a mortgage?
When transferring a loan to another bank, you need to prepare:
- The loan agreement from the previous bank.
- Documents confirming the current balance of the debt.
- Property-related documents, e.g., an excerpt from the land and mortgage register along with the property valuation.
- Proof of income.
- Bank account statements (e.g., for the last 3-6-12 months).
Costs of refinancing a mortgage
Refinancing costs can include:
- Cost of property valuation – banks vary in their charges for property valuation. Can vary from ~ 350 to 1200 PLN
- Early repayment fee – this may be charged for loans with variable interest rates signed a few years ago and being repaid before a specified time (specified in your contract), however in almost every case it’a round 0% from the day one, especially on fixed 5 years contracts.
- Fee for granting a refinancing loan – in every offer we have, there’s round 0% of entry fee / commission.
- Court fees – related to changes in entries in the land and mortgage register, what we usually help you with. The cost is about ~ 350 PLN to pay at once for administration fee.
To sum up, in 99% of cases we guide our customers through, the total sum of refinancing costs are around 1000 PLN as sum of property valuation and court mortgage fee. It means, usually you benefit and cover that already after first month of way lower installment reduced on the new mortgage you will got. If your old property valuation is not older than 12 months, you probably won’t be able to pay for w new one – depends in the banks where we’ll do the refinance.
Creditworthiness matters
Refinancing a mortgage involves taking out a new loan. Banks will verify the borrower’s repayment history and creditworthiness. Therefore, it is worth acting quickly when problems with repaying the current loan arise.
Is refinancing your mortgage worth it?
Absolutely! Lowering monthly payments, reducing the total cost of the loan, and improving loan terms are just a few potential benefits. Additionally, it is essential to carefully analyze the refinancing of the mortgage considering all costs and benefits. Contact our experts to get professional help and find the best solution for your financial situation.
Remember:
- You do not have to wait until 5 years of your currently signed fixed rate will expire in your current bank. You can refinance your loan literally day after disbursement of your old loan.
- The whole process, from consultations, analysis, processing the refinancing into a new more profitable bank for you and even supporting you in a bank’s branch – it’s 100% free of charge! You pay us literally nothing, and getting anyway precisely 1:1 the same offer like if you would visit for example ING, Millennium, mBank’s etc. branches by yourself. The banks have a special marketing funds to gratificate us from successful transfers. So it’s a full win – win for either you and us.
Contact Us
If you are considering refinancing your mortgage and want to learn more about the possibilities offered by current market conditions, contact us today. Our experts will help you analyze the available options and choose the best offer. Click here to speak with our mortgage expert.
Call us on +48 12 352 12 12 or fill out the contact form on contact page to schedule a free consultation. We are here to help you!
Refinancing your mortgage can be a crucial step towards improving your financial situation. Take advantage of our knowledge and experience to find the most beneficial solution for yourself.