Mortgage Loan Refinancing

Information about the falling interest rates is arising from all sides nowadays. For those having a mortgage loan with a higher interest in the fixation period, this naturally raises the question:

Can I also achieve these favorable conditions?

The answer is:
Yes, during the so-called fixation period, changing the bank is more difficult, but not impossible. Most people live in the belief that they have to stay with the current bank throughout the fixation period depriving themselves of the opportunity to obtain a more advantageous offer and reduce their monthly payment. However, the opposite might be true!

a) What are the fees charged by banks for early termination of the contract?

There is no formula that would enable you to calculate the fee. Banks are always calculating the so-called ‘purposefully incurred costs’ that are submitted to clients for assessment. This number
depends on many variables, such as:

  • Current interest rates
  • The interest rate at the time of signing the original mortgage loan
  • Period of taking the mortgage loan: contracts signed before 2016 are governed by the old
  • Consumer Credit Act allowing banks to charge "meaningless" fees of up to 10% of the loan amount
  • Policies of the individual banks financing the loan
  • Administrative costs associated with early repayment
  • And many others

b) What are the costs for the information about the earlier repayment?

Although it may seem hard to believe, the so-called loan calculation is entirely free from some of the banks and for 500CZK in the rest of them. So you don’t have to worry about other pointless high fees.

c) When can you expect the result of your requirement?

You can expect to receive the calculation within 1-3 weeks, depending on the bank.

d) Refinance your loan quickly and effectively

Was your original loan associated with stress, ambiguity, time investments, and you would like to avoid that again? Don’t worry; refinancing is generally much more comfortable and more enjoyable. No seller, real estate agent, lawyers, and negotiating. By default, we are ready to sign the contract within 14 days since applying.

e) Would you like to know your options?

In Check to be Czech, we cover our clients’ refinancing process from the very beginning, since receiving the requirements. Let’s take at the whole process, step by step:

I. We prepare a request for the bank financing your original mortgage loan

Real estate refinancing is always tied to a specific day, requiring sufficient time to process a new
mortgage loan. This day is a deadline for repaying the current mortgage loan.

II. We receive the information about the unpaid part of the loan and the early repayment fee

III. We analyze the current market conditions

Our mortgage team meets with representatives of individual banks and negotiates the best
conditions for potential refinancing.

IV. We process a detailed calculation to compare the benefits of the negotiated conditions

To assess the negotiated conditions' advantage, we compare the financial savings connected to a
lower interest rate with the fee for early repayment of your current loan.

V. Is the financial difference interesting enough for you? Let’s process refinancing. We will:

  • collect all necessary documents
  • hand over the folder to the bank
  • lead the communication with the bank
  • provide a new real estate appraisal
  • supervise the entire refinancing process
  • help you meet the conditions for repaying your current loan
  • insert a new pledge at the real estate cadastre

f) Example

At the beginning of June, we were approached by a client with a mortgage loan of CZK 2.8 million
financed in 2017 with a 10-year fixation and an interest rate of 3.25%. What is the result of our

  1. A new loan with a rate of 1.99%
  2. Reducing the payment by 1,851 CZK per month
  3. Fixation period of 7 years
  4. Total savings: 129,484 CZK after counting the fee of 26,000 CZK
  5. Loan completely free of charge (except for the deposit of a lien CZK 2,000)
  6. Refinancing completed within 14 days

What can you take from this article?

Despite the 100% certainty that you will pay penalty fees for early loan repayment, it makes sense to determine the current conditions for refinancing a loan to another bank. Even though you are still in the fixation period, one request can save you tens of thousands of CZK.

Besides, if you let Check be Czech to take care of the refinancing, the whole process will be smooth, effective, and with only 3-4 hours invested from your side.

We will take care of the entire process for you. Just provide us with essential information such as current interest rate, beginning, and end of the fixation period, financing bank, and leave the rest to us.

It can’t be easier.

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