Refinance vs Retention Which Option Saves More on Interest

When managing home loans or property financing, you might often hear the terms Refinance (Refinance) and Retention (Retention). Both are strategies that can help you save on interest costs, but they operate on different principles and yield different outcomes. Understanding these differences will help you choose the most suitable option for your situation.

What is Refinance?

Refinance involves taking out a new loan from a different financial institution to pay off your existing loan with your current one. Typically, refinancing is pursued when a borrower finds a new institution offering a lower interest rate or better terms, aiming to reduce the long-term interest burden.

What is Retention?

Retention is when your current financial institution offers special deals or adjusts interest rates to keep you as a customer. In simpler terms, it’s negotiating with your existing bank to secure a lower interest rate without having to move to a new institution.

Refinance vs Retention Which is Better?

The choice between refinance and retention depends on several factors:

• Interest Rates If you find refinancing offers from elsewhere that are significantly lower than your current interest rate, refinancing might be the better choice.
• Terms and Fees Consider all associated fees for refinancing, such as appraisal fees, new mortgage registration fees, or stamp duty. Compare these with retention offers that might have hidden costs.
• Convenience Retention is generally more convenient as it avoids the complex documentation process of a new loan application.
• Relationship with Current Financial Institution If you have a good payment history and a positive relationship with your current bank, negotiating for retention might be easier.

Preparing for Interest Savings

Whether you choose refinance or retention, it’s crucial to have your financial information well-prepared. Check your credit history and thoroughly research all available offers.

For those looking to invest in property in Thailand and seeking guidance on loans, including managing transactions that may involve cross-border financing, SUN Gateway offers the Thai Overseas Loan Readiness Service to prepare you for loan readiness. We also provide comprehensive services throughout your property ownership journey in Thailand, from property due diligence and acquisition to post-purchase care.

Buying property in Thailand? Have someone on your side.
SUN Gateway verifies, acquires, closes, and cares for your property — buyer-side only
 Tel: +66-2-231-6800
 Email: online@sungateway.co.th
 https://sungateway.co.th/contact-us/