Improve Your Mortgage: Save thousands of euros without moving home

Moving your mortgage to another bank is done through a subrogation: the new lender takes over your loan on better terms. It is the most common way to achieve a significant improvement, and the new bank generally covers the costs of the switch. Before accepting, the bank reviews the outstanding balance, a new valuation of the property, your employment situation and your payment history. Whether the switch goes ahead, and on what terms, always depends on your profile.

A novation changes the terms with your current bank, while a subrogation moves the mortgage to another bank. A novation is the simplest route but usually leaves less room for improvement, because your bank knows you would rather avoid switching. A subrogation requires a new assessment of your profile, but it is the most common option when you are looking for a significant improvement. Which one suits you depends on your current terms and the offers available for your profile.

Improving your mortgage is usually worthwhile when market conditions or your own situation are better than when you signed. It is particularly interesting if your mortgage is more than 3 years old and the market offers lower rates, if you have a variable-rate mortgage and want to move to a fixed or mixed rate, or if Euribor has risen and your payment has shot up. It can also pay off if your employment situation has improved or if you have several debts. In every case, compare the estimated savings with the costs of the change.

The savings depend on the outstanding balance, the remaining term and the rate reduction you obtain. As a reference, a 0.5-point cut in the interest rate on a 200,000 EUR mortgage over 20 years means savings of roughly 10,000 EUR over the life of the loan. The improvement can be greater if the mortgage was signed years ago on less competitive terms. Duplo Capital reviews your current mortgage to estimate how much you could save in your specific case, with no guaranteed outcome.

Banks mainly require a sufficient outstanding balance, a profile that is the same as or better than when you signed, and a payment history with no arrears. They generally do not accept subrogations below 50,000 EUR of outstanding capital. A new valuation of the property is also carried out, and if its value has risen the terms may improve. Finally, the new monthly payment should not exceed 35% of your current net income.

Yes, debt consolidation groups several debts, such as your mortgage, personal loans or credit cards, into a single, lower monthly mortgage payment. Its aim is to ease the monthly financial pressure. In return, it can extend the total repayment term, so the overall cost does not always fall. Whether it is feasible depends on your profile, the value of the property and your borrowing capacity.