Want to lower your mortgage payments without refinancing your entire mortgage? Then interest rate averaging could be a smart solution! At Crefin & Partners, we help you understand exactly how interest rate averaging works and whether it suits your personal situation. Below, we clearly explain everything you need to know: what interest rate averaging is, how it works in practice, the advantages and disadvantages, and more. Feel free to schedule a free, no-obligation consultation to discover whether you could save money this way!
Interest rate averaging is a convenient way to lower your mortgage interest rate without fully refinancing your mortgage. Your current – often higher – interest rate is combined with the lower market rate currently available. The bank then calculates a new average interest rate for a new fixed-rate period.The costs of breaking your current mortgage contract (the early repayment penalty) are not charged as a large one-time payment. Instead, they are spread out over the new fixed-rate period. This means you avoid paying a substantial amount upfront. As a result, your monthly payments can decrease immediately, especially if you are currently paying a relatively high interest rate.At Crefin & Partners, we compare the options offered by more than 35 banks to determine whether interest rate averaging is a good deal for you. We explain everything clearly, so you know exactly what to expect.
For example, imagine you have a mortgage of €200,000 with 5 years remaining at an interest rate of 5%. The current market rate for a new 10-year fixed-rate period is 2.5%. With interest rate averaging, the bank calculates an average rate, for example: (5% + 2,5%) ÷ 2 = 3,75% The early repayment penalty is then added and spread out over the new period, resulting in a new interest rate of, for example, 3.9%.That is lower than your original 5%, although slightly higher than the current market rate. The result: your monthly payments decrease, for example from €833 to around €650 per month. Not every bank offers interest rate averaging, and the exact calculations vary between lenders.Our mortgage advisors are happy to calculate free of charge whether interest rate averaging is worthwhile in your situation.
Interest rate averaging offers several attractive benefits:
Our mortgage advisors at Crefin & Partners help you determine how these benefits apply to your personal situation.
There are also a few disadvantages to keep in mind:
Not sure whether interest rate averaging is the best choice? We are happy to compare it with refinancing so you can see which option provides the greatest benefit in the long term.
Interest rate averaging is particularly interesting if you want lower monthly payments without the hassle and costs of refinancing. It is well suited for:
Our mortgage advisors review your mortgage, income, and future plans to determine whether interest rate averaging suits your situation.
The main cost consists of the early repayment penalty, which is spread out over the new fixed-rate period. Some banks may charge a small administrative fee, but generally there are no additional advisory or notary fees.At Crefin & Partners, we charge a fixed fee for our mortgage advice, which may also be tax-deductible. Please visit our rates page for more details. Would you like a personalised calculation? Our mortgage advisors are happy to prepare one for you.
At Crefin & Partners, we make interest rate averaging easy to understand and completely transparent. As your mortgage advisor, we offer:
Can I Arrange Interest Rate Averaging With Every Bank?
No, not all banks offer this option. We check the possibilities available with your lender.
Is Interest Rate Averaging Always Cheaper Than Refinancing?
Not necessarily. Refinancing may provide a lower interest rate, but it also comes with higher one-time costs. We calculate both options for you so you can make the best choice.
How Long Does the Interest Rate Averaging Process Take?
It is often faster than refinancing – sometimes completed within just a few weeks. We guide you through the entire process from start to finish.
What Does Your Advice Cost?
The first consultation is always free. For complete mortgage advice, we charge a fixed fee, which may be tax-deductible.
Would you like to lower your monthly mortgage payments through interest rate averaging for your home? Schedule a free, no-obligation appointment with Crefin & Partners. Your mortgage advisor will help you find the best solution for your mortgage. Feel free to contact us or request your free consultation today!
