Borrowing, credit broker, enlightens you on the subject and in particular on the cost of refinancing. The rates applied are used to calculate the overall amount of the transaction . And another prejudice is to think that the rates charged for buying back credit are very high.
The rate of a loan repurchase cannot in fact exceed the attrition rate fixed each quarter by the Agree Bank . A somewhat technical term which nevertheless deserves to be explained. The rate of usury cannot exceed by a third the average rate practiced by the banks according to the project (consumer credit or real estate), the duration and the amount. The usury rate therefore fluctuates according to the average rate of credit institutions. If it increases, so does the wear rate and vice versa.
For home loans everything depends on the duration and the type of rate (variable or fixed). For fixed rates:
3.12% maximum over 10 years,
3.09% maximum between 10 and 20 years,
3.25% maximum for loans over 20 years.
So if you thought that the mortgage repurchase rates (those that include a home loan) were very high, they cannot exceed that threshold. And in times of low real estate rates, the entire credit sector benefits .
For consumer loans:
20.60% for an amount less than or equal to 3,000 USD (note that for revolving credits the rates are often high which gives an average high consumer credit rate),
13.12% for a loan of 3,000 to 6,000 USD,
6.40% for a loan greater than 6,000 USD.
Thus interest makes it possible to calculate the total cost of a loan buy-back over the term of the loan. But this operation has a cost for the borrower, which will be integrated into the financing plan. The borrower will have to pay early redemption indemnities (IRA), notary fees, bank fees but also brokerage fees. For the purchase of consumer credits, it is the same principle except that he will not have to pay notary fees.
The repurchase of credit makes it possible to integrate new projects and to simplify the management of the accounts. It is intended, inter alia, for people who have low debt and who wish to have cash for work, leisure, the purchase of a vehicle, etc.