Debt rescheduling your home loan – how it works

For most home loan borrowers, there will certainly be a time when the question of the right debt rescheduling for the loan arises – a time of great uncertainty for the borrower, because on the one hand it has to be calculated when the debt rescheduling will take place worthwhile, and then the search for a new financing offer begins. It is seldom advisable to stay with the same bank – loans are often rescheduled by switching to a new bank.

Debt rescheduling

Debt rescheduling

In the case of rescheduling, additional costs or fees are payable that the borrower must bear. These include, for example, processing fees, even if many banks, as a goodwill act, and because they ultimately want to retain the new customer, do without – in any case, however, notary fees and land registry costs, which amount to approximately 0.5% of the loan amount.

The borrower who contacted the bank for debt rescheduling cannot avoid these costs, because on the one hand it is necessary that the loaned property is revalued, which is why the borrower must also provide various property documents, and on the other hand the land charge has to be added To be changed in favor of the new bank: To this end, the old land charge is either wholly or partially deleted and re-registered, or transferred to the new bank.

Loan termination

Loan termination

Termination of the loan should not be a problem if the fixed interest period has already passed. Generally, after ten years, borrowers have the right to terminate a loan with 6 months’ notice. If the contract is terminated within the fixed interest period, provided the bank agrees to this, prepayment penalty must be paid.

If you do not want to pay prepayment penalty, but at the same time are flirting with currently low interest rates, you can take out a forward loan. However, it must be the case that the fixed interest rate will end in a maximum of three years, and one must also accept an interest premium, albeit a small one, in contrast to the currently applicable interest rates.

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