Manage your mortgage — don't expect it to manage itself
In 5 min you'll know: how to review your mortgage at least once a year — renegotiate, compare or switch
In Block 2, Lesson 4 you learnt to compare mortgage offers using the (annual percentage rate of charge — total credit cost). Now let's assume you already have the mortgage — and that the work doesn't end at the contract signing. A mortgage is a 20- to 40-year commitment. Over that period, interest rates change, your income evolves and the property market fluctuates. If you never revisit your mortgage, you are passively accepting whatever the bank gives you. The rule: review your mortgage at least once a year — renegotiate, compare or switch.
Before you continue: when comparing mortgages, which indicator shows you the real cost — the payment, the nominal rate, or the TAEG?
(Answer in the next paragraph.)
The TAEG is the number that tells you the real cost of credit, including interest, fees, mandatory insurance and taxes. The (the Eurozone interbank reference rate) is the benchmark rate for euro-denominated loans — it rises and falls with European Central Bank policy. When the Euribor rises, your monthly payment goes up if you have a variable rate. When it falls, the bank does not always lower the payment automatically — you have to ask. Knowing the composition of your monthly payment (Euribor + spread + insurance) is the minimum for managing your mortgage.
Renegotiation is not asking for a favour — it is a commercial transaction to improve your TAEG. The bank would rather keep you as a client than lose you to the competition. Your leverage: a payment history with no defaults, property value vs. outstanding capital (if the house is worth more than you owe, the bank's risk is lower), and concrete offers from other banks. You can renegotiate the spread, the term, the rate type (variable to mixed or fixed), or transfer the mortgage to another bank. Mortgage portability is a right — the new bank handles the entire process.
The scenario most people overlook: early repayment. If you have excess liquidity, putting it in a deposit at 3% while paying a mortgage at 4% is losing money. Every euro repaid on the mortgage is a guaranteed return equal to the loan rate, with no risk. Check whether your contract has an early repayment fee (many older contracts do; newer ones are limited by law) and do the maths.
Notice: Mowei is a financial education and comparison platform. We are not financial advisors authorised by the Banco de Portugal. This lesson is general information, not personalised advice. For decisions about specific products, consult a financial intermediary registered at www.bportugal.pt.
Compare your current repayment against 3 alternatives (3 min) →
Your promise: This month, I will open my mortgage FINE and compare the APR with at least 2 market alternatives.