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Mortgage Refinancing - A Check That Can Save You Significantly Every Month
A mortgage taken a few years ago is almost always worth a fresh refinance check. The mortgage interest market changes, your financial situation has changed, and sometimes your needs have too - another child, a change in income, a wish to shorten the term. A mortgage refinance check examines whether there is an economic case for changing tracks or banks. If the answer is negative, you have lost nothing and have changed nothing in your existing mortgage.
Possible benefits
Reducing the monthly payment
If the average mortgage interest rate in the market has dropped since you took your mortgage, it may be possible to reduce the monthly payment on the same principal balance.
Shortening the mortgage term
Alternatively, you can keep approximately the same monthly payment but finish paying earlier - and thus save on total interest.
Matching your current life situation
A mortgage mix built years ago does not necessarily suit your situation today, whether your income or your financial goals have changed.
Changing the risk composition of the mix
You can move part of the balance from volatile tracks to more stable ones, or the opposite, according to what suits you today.
The common mistake: looking only at the nominal mortgage interest rate
Many people check a mortgage refinance by comparing their current interest rate to the rate offered today, and decide according to that difference alone. But the real check must also include the early repayment fee on the existing mortgage as well as the remaining term.
Partial refinancing - keep what is good, improve what is expensive
It is not always necessary to refinance the entire mortgage. Sometimes only some of the tracks in the existing mix are truly expensive relative to the market, while other tracks are still worthwhile and there is no point in touching them. A partial refinance, which deals only with the problematic part, can be more worthwhile and faster than dismantling the entire existing mortgage.
How to improve your chances of good terms
First check whether there is an early repayment fee
The fee can cancel a significant part of the expected saving, so it is the first parameter to check.
Check the full mix, not a single track
Sometimes a targeted refinance of one track is more worthwhile than dismantling the entire mortgage.
Match the refinance to your goal
A lower payment and an earlier finish are two different goals that require a different refinance structure.
In summary
A mortgage refinance is one of the most worthwhile checks you can do without any risk - if no case is found, you do not move an inch. The only way to know for sure is to check with a mortgage advisor, not to guess based on what you read or heard.
Frequently asked questions: Mortgage Refinancing
How often is it worth checking a mortgage refinance?
There is no fixed frequency, but a good rule of thumb is to check whenever the Bank of Israel rate has changed significantly, or once every year or two in any case.
Does a mortgage refinance involve costs?
There may be costs such as an early repayment fee on the existing mortgage and the costs of opening a new file - so the check always includes a cost-versus-benefit calculation before recommending going ahead.
Can you refinance a mortgage at the same bank?
Yes, and this is usually called a “change of terms” rather than a full refinance - sometimes the existing bank is willing to improve terms so as not to lose a customer, without going through a full process of opening a new file at another institution.
How long does a mortgage refinance process take?
Usually between two weeks and a month and a half, depending on the availability of documents and the bank's workload. A process with the existing bank is usually faster than opening a new file at another institution.
Does refinancing a mortgage affect your credit score?
The refinance check itself does not harm your score. If you eventually open a new credit facility in place of the old one, it is recorded as ordinary financial activity and should not harm your score in the long term.
What makes us different
Why choose Bar Ors Finance
Personal guidance, not a call center
The same mortgage advisor guides you from the first introductory call to receiving the keys - no hand-offs between representatives and no explaining your file from scratch each time.
Experience as a mortgage advisor since 2019
Years of working with Israeli banks, including specialization in cases that need more than the standard playbook.
Member of the Israeli Mortgage Advisors Association
Operating within the regulation and a professional standard recognized in the Israeli mortgage advisory industry.
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Service nationwide, in person or remote
Meetings in the Or Akiva area and surroundings, and video and phone calls for customers from all over the country - with exactly the same level of guidance.
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