Refinancing

Refinancing involves replacing an existing mortgage with a new one offering better conditions (lower rate, different term). In Belgium, two options exist: renegotiation with the same bank (no release or new registration fees) or buyout by another bank (release costs + new mortgage registration). External refinancing costs include: reinvestment indemnity (maximum 3 months' interest), mortgage release costs, the new mortgage registration (with a 1% registration duty on the registered amount), and file fees. Refinancing pays off mainly when the rate gap is clear and the outstanding balance is large. It is advisable to calculate the break-even point by comparing interest savings to total costs.