Refinancing and interest rate averaging
Refinancing your mortgage
You can consider refinancing your mortgage during or after your fixed-interest period. This allows you to benefit from the current low level of interest rates
. If you want to break your interest-rate agreement, you will have to pay a penalty to the lender. The penalty can be deducted from tax on one occasion, so you will get some of it back from the Tax & Customs Administration. In some cases you may be able to finance the penalty from your new mortgage. We will look for the best construction for your situation. Ask your adviser
to explain the possibilities.
Interest averaging: pay less with no refinancing penalty
If you cannot afford the refinancing penalty, or financing it with the new mortgage is not an option, you may be able to use interest averaging. This can be attractive if your interest rate is still fixed for a number of years and the current interest rate
is significantly lower. This will enable you to benefit to some extent from the lower interest rate without paying a penalty. Ask your adviser to explain the possibilities.
Discuss the possibilities with an adviser