Transfer of housing credit: when to ponder?
In the course of your loan you have the possibility to compare other offers and if you realize that they may be advantageous, it is time to ask for new proposals. For example, you have a loan spread 1.6% and in the current market banks offer 1%, it may be a good time to try to improve the conditions of the housing credit agreement.
Suppose Andreia had a loan of €98,000 with a spread of 1.4% to 40 years, thus paying monthly €283. By transferring the housing credit to Banco A, with a spread of 1%, it began to pay monthly 232€. This translates into savings of €51 per month, €612 a year and €24,480 at the end of the 30-year contract.*
*Considering Euribor at 6 months of -0.476% in March 2022.
When you transfer your home loan from one bank to another, what happens is:
- The debt in your previous bank will be fully paid by the new Bank;
- A new loan is contracted at the newly elected bank;
- This operation is called an early refund.
Andreia has a loan of 98,000€ at Banco A and will transfer it to Banco B. Banco B pays 98,000€ to Banco A. Andreia then stays with its loan at Banco B.
What are the costs of a housing credit transfer?
As this is an early repayment, Bank A may require a commission of up to 0.5% in the case of a variable interest rate or up to 2% in the case of a fixed interest rate.
Banco A may also require the payment of costs it has had in the contracting of your housing credit, such as costs with conservatories, notarial notarial, among others. You can also charge interest until the date of the transfer of the home loan.
Banco B may charge the costs of a new process: dossier commission, property valuation, deed, etc. If possible, the ideal would be to consider transferring your home loan during the bank transfer campaigns , as these costs will be covered by the new entity.
Documents needed to transfer housing credit:
The documentation required for a housing credit transfer process is the same as that provided when contracted a new one. You will need to provide:
- Citizen Card;
- 3 last winning receipts or 6 last months of green receipts;
- Bank statements of the last 3 months;
- IRS statement and its settlement note;
- Bank of Portugal's Responsibility Map;
- Copy of the original Deed and Complementary Document;
- Employer's statement attesting to the employment relationship;
- Property documentation.
How to request the transfer of housing credit?
After providing the necessary documentation, you should collect and compare the various proposals submitted in order to choose the most advantageous. It takes into account key indicators such as TAEG and MTIC.
So, once you select the best proposal, you will only have to communicate to your Bank that you want to transfer the home loan and ask for the distrate. This document proves the end of your debt at that Institution and must be requested 10 days before the date of the new deed .
After this step, just show up on the date of the new deed , since the cancellation of the previous mortgage will be done simultaneously with the new mortgage at the time of deed.