The goal of our site is, you will understand, to help you understand and succeed your mortgage. For this, we offer a guide to the best advice for your home loan. We see today the 5 key points to save on his mortgage .
- 1 Real estate rate: the nerve of war
- 2 Duration: The shorter it is, the less expensive
- 3 Insurance: Considerable weight in the cost of your credit
- 3.1 Example of gain on insurance for a 25-year-old non-smoking healthy couple
- 4 Fees: Negotiate or offer them to you!
- 5 Warranty Fee: Opt for the cheapest
Real estate rate: the nerve of war
This is obviously the first thing to look at when you are presented with a loan proposal: the rate! Attention, there are different types of rates for the mortgage :
- The nominal rate: This is the cost of the loan. The interest rate of the credit. It includes only bank interest. Its advantage: It is very easy to compare from one bank to another.
- The APR: The Annual Total Effective Rate has been implemented recently. It includes all the costs related to the loan, namely: bank interest (= nominal rate), insurance, warranty costs, fees and the operating cost of your bank account. Its advantage is that it includes everything! The disadvantage is that it is not always easy to compare it from one bank to another because the characteristics are not necessarily the same from one proposal to another.
Whatever happens, the lower the rate, the lower your mortgage will cost you and the more you save!
Do not hesitate to consult our small study on the impact of rates on a mortgage loan .
Duration: The shorter it is, the less expensive
The other point related to the rate is the duration of your mortgage. Indeed, we often forget that beyond the rate, duration plays an important role in the cost of your financing. Indeed, at equal rates, the longer the duration, the higher the sum of interest will be and therefore the more it will cost you.
On the other hand, the duration affects the rate of your loan . The shorter you choose, the lower the rate offered by the bank. This is mainly due to the level of risk (the lower the loan, the lower the risk of lending to the bank).
Insurance: Considerable weight in the cost of your credit
Do you know that you do not have to take the loan insurance offered by your banker ? Indeed, you can play the competition and take insurance outside the bank (= a delegation of insurance). The bank will not have the right to refuse if the guarantees are at least equivalent to the bank’s insurance.
And playing the competition can pay you big!
Example of a gain on insurance for a 25-year-old non-smoking healthy couple
Example standard bank insurance rate: 0.25%
Example insurance rate in delegation: 0.10%
For a loan of € 200,000, the total cost of insurance of the bank is € 20,000 while the total cost of insurance under delegation is € 8,000, a gain of € 12,000 and a decrease of 60% of the cost of insurance !
Fees: Negotiate or offer them to you!
The fees are not necessarily a key point in the negotiation (it is better to negotiate its rate rather than its fees …!). Nevertheless, if you can, try a negotiation on these. This negotiation will be avoided for the majority of online banks that offer these famous fees . Good!
Warranty Fee: Opt for the cheapest
The guarantee of your loan is an insurance taken by the bank on the fact that it can, at any time in case of default of payment on your part, resell your property. It is usually the bank that chooses the guarantee it wants to apply. This will be either a real guarantee ( mortgage , PPD ) or a guarantee deposit. The price varies from one guarantee to another. Do not hesitate to ask your advisor for both possibilities in order to compare.