In many cases, banks will no longer be able to charge customers reinvestment fees if they want to refinance their home loan. The federal government wants to take measures to reduce costs before the end of the legislature. That’s what ‘De Tijd’ and ‘L’Echo’ wrote.
There are costs associated with refinancing a home loan. For example, customers must pay a reinvestment fee. That is a sum that corresponds to up to three months’ interest on the remaining amount of their loan, whether they change banks or not. The bank also charges file costs. And in many cases the intervention of a notary is required, which seriously increases the costs.
Federal Minister of Economy Pierre-Yves Dermagne (PS) now has a proposal ready to tackle those costs for refinancing. “Steps are being taken that will oblige banks to opt for a change to the mortgage loan when refinancing, rather than concluding a new credit agreement,” the Dermagne cabinet said.
Adjustments
This concerns, for example, an adjustment to the interest rate, the repayment method or the term of the mortgage contract. The fact that the loan is simply changed and that a new contract no longer has to be concluded will entail much lower costs for the borrower.
For example, the costs for an adjustment are half lower than the costs for applying for a new contract, says Dermagne. With a new credit agreement, the consumer must pay the application costs and a reinvestment fee, because the bank believes that the consumer is repaying his agreement early. But from the consumer’s point of view, it is just a simple adjustment to the contract.
A passage through the notary will also no longer be necessary. This is often the case when taking out a new loan.
Not in all situations
Dermagne’s proposals do not apply in all situations: for example, anyone who wants to temporarily suspend interest repayments or change the amount of a loan will still have to conclude a new credit agreement. The same applies to those who want to change banks.
According to Minister Dermagne, this is an important measure, “at a time when interest rates on loans are falling and consumers want to allow competition to play out.” He is confident that the proposal will be approved this legislature. It is part of a potpourri law, which contains the most diverse provisions.
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