Extending your mortgage. Adjusting the financing of real estate to new needs.
If you are extending your mortgage, the focus should be on your needs. Perhaps you would like to simultaneously increase or repay the mortgage? Find out what you should take into consideration when extending your mortgage.
Extending a mortgage upon maturity
If a mortgage is expiring in the next few months, property owners will need to think about extending their mortgage. The mortgage amount and the type of mortgage are two key considerations: Should the mortgage be extended in the same scope? Will the previously selected mortgage also be appropriate for the next few years? Or would another mortgage model suit your current needs better?
Perhaps you have started a family, now earn more or less than when you took out the mortgage, have received an inheritance, or are planning a major renovation. All these scenarios can affect how you extend your mortgage.
The ideal time to extend a mortgage
If you want to extend your mortgage, you need to know when your current mortgage expires. A mortgage is usually extended toward the end of the term. However, with a Forward fix mortgage it is possible to fix the interest rate up to three years in advance and thus renew the mortgage early. The best thing to do is contact your relationship manager. They will discuss your financial situation and your plans with you, in order to find the right financing option for you. Our extension checklist will help you ask the right questions. If you would like to renew the mortgage without making any changes, you can extend it yourself online in just a few clicks.
Renewing a mortgage with partial repayment
When extending, it is worth checking whether you can make a voluntarily repayment of part of the mortgage. It is not possible to reduce the mortgage amount during the fixed term, but if you are renewing a mortgage you can pay back part of the mortgage amount, meaning that the extension will be for a lower amount. If you have received an inheritance or have been able to set aside considerable savings, for instance, partial repayment can be a good option.
Extending and simultaneously increasing a mortgage
If the mortgage is renewed, it is possible to increase it under certain circumstances – provided that the mortgage is still affordable in the case of a higher loan-to-value ratio. Reasons for an increase may be a planned property extension or larger-scale renovations that cannot be funded by other means. An energy renovation makes sense for older buildings, for instance, but it is also expensive.
Under certain circumstances, it may also make sense to increase your mortgage in old age. This is because income usually decreases upon reaching retirement age. If the mortgage is increased, financial leeway also goes up. There is no guarantee that the bank will approve an increase. However, if you have a renewal coming up it is worth discussing your personal situation and the need to increase your mortgage.
Adjusting the mortgage model to suit your own needs
In addition to the time of extension and the financing amount, the type and term of the mortgage should also be reviewed. Depending on whether your interest rate expectations and your risk profile have changed, you will want to choose another mortgage model when refinancing. If you are particularly cautious, for instance, a Fix mortgage offering both a fixed term and a fixed amount and interest rate, may be the right choice for you. If you want to enjoy the greatest possible flexibility, a SARON mortgage might be your best option. This product replaced the LIBOR-based Flex rollover mortgage at the end of 2021.
If you currently have a LIBOR mortgage with Credit Suisse, someone will get in touch in with you as soon as action is required.
Assessing the extension individually
Because life situations and therefore requirements for a mortgage can change, it is important to fundamentally rethink which mortgage is right for you when renewing. Give yourself enough time to understand your needs. Factors such as the current interest rate situation and expected interest rates developments must be taken into account. If you expect interest rates to increase in the future, it may make sense to extend your mortgage early in order to benefit from the current low interest rate.