Evaluate the profitability of refinancing your mortgage
Mortgage refinance, also called loan renegotiation, consists of replacing your current mortgage with a new loan at a more advantageous rate. The main objective is to reduce the total cost of your loan by taking advantage of falling interest rates in the market. Two options are available: - Internal renegotiation: You stay with your current bank which agrees to lower your loan rate. Fewer fees but potentially less savings. - External buyout: You have your loan bought out by a competing bank. More fees but potentially better conditions.
A difference of at least 0.7% between your current rate and the new proposed rate is recommended.
The more years you have left to repay, the greater the savings. Ideally: 10 years minimum.
A remaining principal above €70,000 makes it easier to recoup the fees.
Your borrower profile must allow you to obtain an advantageous rate from banks.
IRAs are capped by law at 3% of the remaining principal or 6 months of interest (whichever is lower).
The new bank charges processing fees for your application. Variable amount: €500 to €1,500.
If you change banks, you must pay for new guarantees (mortgage, surety). Estimated cost: 0.5 to 1.5% of principal.
During an external buyout, you must take out new insurance. Thanks to the Lemoine Law (2022), you can switch insurance at any time, free of charge — delegation can reduce costs by 30 to 50%.
If refinancing is not profitable in your situation, several alternatives exist: - Internal renegotiation: Ask your bank to lower your rate - Payment modulation: Some contracts allow you to temporarily increase your payments - Partial early repayment: Repaying part of the principal reduces future interest - Change borrower insurance: Since the Lemoine law (2022), you can change insurance at any time
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Enter the characteristics of your current loan and the proposed new loan
* Required field
Amount you still have to repay
Interest rate of your current loan
15 years
Interest rate for the refinance
15 years
Calculated automatically (sum of detailed fees)
Can be calculated automatically
Usually 500-1000€
Mortgage or surety (0€ if internal)
New insurance will be calculated on remaining capital