Interest rates fly and with them the costs of loans and mortgages grow, especially for those who have taken out a variable rate mortgage.
The latest alarm comes from an analysis by Fabi, the leading banking union in Italy: rates are already above 4% and after the latest hike by the ECB, of 75 basis points, they will probably break through the 5 threshold shortly %. Which means, according to estimates by consumer associations, an increase in installments of 50 euros more per month.
There are two ways for those who have a home loan, the renegotiation with the same bank that issued the mortgage or the subrogation, or the transfer of the mortgage to another bank. What should you do?
There are many advantages of mortgage renegotiation:
does not involve additional costs
no need for a notary again;
there are no commissions or new costs to bear.
The main problem is finding an agreement with the bank, which is not always available for renegotiation and is not always available to do it on truly advantageous terms for the customer.
In the case of a transition from a variable rate to a fixed rate, the costs and benefits of the operation will certainly have to be considered, also with reference to the duration of the loan and the sustainability of the monthly payment. The objective, in this case, is to pay a cost, a rate that is certainly higher than the variable one, against the benefit of avoiding the risk of higher future price increases. The renegotiation does not extinguish the loan previously stipulated nor cancel the guarantees provided by the bank. In short, it is a way to modify conditions and adapt them to new needs.
The subrogation of the loan
It is an operation which, unlike renegotiation, allows you to replace the existing mortgage with a new one, at different conditions, at another bank.
According to the Bersani law of 2007, banks cannot ask for commissions and there are no expenses to be incurred. The only option is the payment of the subrogation registration fee in the Real Estate Registers, equal to 35 euros. In fact, the law states that "expenses or commissions cannot be imposed on the customer for the granting of the new loan, for the preliminary investigation and for the land registry checks, which are carried out according to procedures of collaboration between intermediaries based on criteria of maximum reduction of times, of the obligations and related costs".
However, the sum disbursed by the new bank cannot exceed the amount of the residual debt. Obviously, the conditions proposed by the new bank make the difference. In the case of the transition from the floating rate to the fixed rate, the offers of different banks on the market will have to be compared. However, there is another factor to keep in mind. If you are close to the natural expiry of the loan, and therefore at the end of the repayment, the interest rate has already been paid almost in full and this must be considered by looking at the savings that you will have with the new installment. Which runs the risk of being reduced to zeroing out.
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