Question about refinancing the mortgage

[vladojko]

Hello,

Sorry for the message in English, I can read and understand Flemish with no issue but it is (still) difficult for me to properly express myself in writing.

I have a mortgage in one of Belgian banks and remaining period is 11 years. I have enough cash right now to pay 50% of the mortgage and my idea was to reduce the length of the mortgage, but to keep monthly payment the same. However, the bank does not want to accept that and they say I can't reduce the length to less than 10 years but I can reduce the monthly payment. If I shorten the length then it won't be a mortgage anymore but just a normal loan and for that the fiscal advantage is zero.

I understand that this is true if I would go to some other bank, but if I stay in the same bank and just tweak the current mortgage (that I was paying for last 7 years by the way) in theory I would not lose the fiscal advantage as it would still be a same loan that is registered with the notaris 7 years ago.

My question is: is it really the truth what is bank saying me and they are unable to do it due to legal restrictions, or they simply do not want to shorten the length because it is not in their advantage (as they would lose 30k EUR of the interests that I am still due to pay with current mortgage).

Thanks a lot for the help

[basejumper]

The total lenght of the loan has to be minimal 10 years. A refinancing of the current loan is considered fiscal as a continuation of the current loan. So the 10 years is the sum of the current loan and the refinanement. If the current loan existed already 7 years, a refinancing has to take minimal three years so a total lenght of 10 years minimal is the result.
The advice of the bank is wrong... You can ask the employee an answer of the fiscal departement of the bank.

Indien zowel het oorspronkelijk krediet als het herfinancieringskrediet is afgesloten na 1 januari 2005 voor de enige en eigen woning, dan zal de herfinanciering onderworpen blijven aan de aftrek enige en eigen woning op voorwaarde dat de totale looptijd van het krediet 10 jaar blijft en de hypothecaire inschrijving geldig blijft.

If the original mortgage and the refinancing has been signed after januari first 2005, for the purchase of your own and only house, the refinancement wil rest fiscal deductable for so far as the total lenght of the mortgage rests 10 years or more and the mortgage registration is still present.

[vladojko]

Thank you for the reply.

Can you please give me the link to the text from the law you quoted, so I can use that as argument in discussion with the bank?

[vladojko]

And one more question, is this still valid even if I refinance the mortgage in the other bank?