Mortgages are contracts with conditions and deadlines. Sooner or later it will be necessary to renew.
This operation, with the same or another establishment, can enable you to make significant savings.
We'll show you how to renew your mortgage in the best possible way, taking into account your financial situation, interest rate trends and market offers.
1. Estimate the value of your property
A good starting point is to know the current value of your property. It has certainly increased since you bought it.
Banks, insurance companies and pension funds will proceed in the same way when analyzing a request for mortgage refinancing.
RealAdvisor is undoubtedly the best online appraisal platform, enabling you to find out the value of your property in just a few clicks. The visit and expertise of a real estate broker can also be very useful, depending on the situation.
2. Analyze your current and future financial needs
Before renewing your mortgage, it's essential to take stock of your financial needs, both in terms of your budget and your projects.
Your situation may have changed since you took out your loan, and so may your needs.
For example, you may need to increase your cash flow, reduce your monthly payments, finance renovation work or prepare for retirement.
Depending on your stage of life, it may be a good idea to do some retirement planning and adapt your mortgage strategy to your goals and debt capacity.
3. Study rate trends and anticipate renewal
Renewing your mortgage is an opportunity to take advantage of fluctuating interest rates, which can vary considerably from period to period and from provider to provider.
To get the best possible rate, it's a good idea to keep an eye on market trends and anticipate your loan renewal.
This means you can book an attractive rate up to 18 months in advance, so you can secure your financing and avoid unpleasant surprises.
4. Compare offers from several establishments
When you renew your mortgage, your current bank will probably make you a new offer, but you don't have to accept it without comparing it with the competition.
In fact, there are many providers on the Swiss mortgage market who can offer you more advantageous terms, whether in terms of rate, term, flexibility or ancillary services.
It is therefore advisable to request customized offers from several establishments, and to compare them in detail.
5. Decide on rate type and duration
The choice of rate type and term are key elements of your mortgage strategy.
There are three main types of rate (fixed, SARON and variable) and terms ranging from 1 to 25 years.
Each option has its advantages and disadvantages, depending on your borrowing profile and your current or future situation.
6. Calculate the tax impact
Maintain, increase or reduce debt?
Free up cash for renovations or pension buy-backs?
Which may be the best option?
An assessment of the tax impact should be taken into account.
For a detailed analysis, advice and precise answers we rely on our tax partner Dyn who perfectly complements our advice on mortgage renewal.
