Renegotiate a mortgage, possible but expensive

A separation, an illness or a period of unemployment are likely to lead to a decrease in income, temporary or lasting

When an individual can no longer repay a home loan that has become too heavy for their finances, what can they do? In this case, it is advisable to activate some safety nets in order to lighten the reimbursement burden. There are different ways to change the terms of a current home loan.

Strategies exist for those who can not make ends meet: suspend credit, get a better rate or extend the term of the loan and payday loan consolidation.


The first thing to do is to reread the contract which details the credit because this document includes all the conditions of reorganization of the loan and the modalities of variations of the monthly payment. In most cases, the amount of the refund can be reduced by 10%, or even 20%, compared to the initial monthly payment. “However, to change the initial situation, banks often require that we wait until the second anniversary of the loan or more,” says Joel Boumendil, president of the broker ACE.

Beware, once the maximum decline is achieved, it is impossible to further reduce the loan amount, even several years later. “Free, this option allows you to adapt with lower revenues than expected,” said Ari Bitton, President of AB Brokerage. Disadvantage: the credit sometimes extends several years, significantly increasing the cost of borrowing. ” We pay less, but longer MPs,” says Philippe Saillard, director of credit at La Poste. Again, banks set limits. The additional credit period cannot exceed three or five years.


More temporary, this option amounts to suspending repayments for a few months. The delays granted by the banks provide for periods without payment ranging from three months to a maximum of six to eight consecutive months. During these periods, the borrower sometimes only has to repay the death and disability insurance. “This momentary shutdown of payments can be a breath of fresh air for fragile finances,” said François Kliber, managing director of GE Money Bank.


In this period of falling mortgage rates, – they fell on average to 3.90% over twenty years at the end of August – some borrowers can consider this solution. “Those who took out a loan between October 2008 and March 2009 are likely to make this kind of request, at the time the rates were between 4, 5 and 5%,” says Sandrine Allonier, head of economic studies at Still, the bank is not obliged to accept this request. When the answer is positive, the economy is appreciable. “In case of financial glitches, this option can soften the monthly payment without affecting the duration,” says Maël Bernier, spokesman for the broker Empruntis.


The lending bank refuses the renegotiation? You can try to find a home loan on better terms at another financial institution. Even if your finances are not good, this card can be attempted, but the operation requires finesse and strategy.

To convince a banker to trust you and give you a new loan with lower repayment payments, you need to present your best profile and emphasize your willingness to take advantage of the recent decline in interest rates. The new bank will also find its interest if you have regular savings, especially if this savings is in the form of investments likely to be repatriated to her. It is well known, we only lend to the rich!

Other criteria may make it possible to take the decision: the domiciliation of your salary at the new bank and a history of current account without any overdraft.

This delicate strategy is only conceivable if the interest rate differential between the new and the old credit is at least 1%. It is on this condition that the operation becomes financially successful because changing banks generate additional expenses. The borrower must pay the handling fees, the loan prepayment (3% of the outstanding capital or six months interest) and the payment of a new financial guarantee.

The game is worth it when the credit is “young”, that is to say, that it started less than five years ago. Because it is during this period that one pays a monthly payment with more interest than capital.