Refinancing a Mortgage Tranche

Dear sir/madame,

I have a question about refinancing thranched mortgages.

I have two mortgage tranches at UBS. The first mortgage tranche is 350,000 Swiss francs and the interest rate is 1.25%. The term is ending in October 2017. The second tranche is 110,000 francs and has a 3.35% interest rate. Its term ends at the end of January, 2020.

Can I refinance or renew the first tranche at a different bank? My goal is to refinance the first tranche of the mortgage to extend it until the end of January 2020 - another 2 years and 3 months.

Thank you and kind regards

Hi there,

One of the primary disadvantages of combination mortgages which are made up of multiple tranches with individual mortgage terms is that refinancing just one tranche of a mortgage to another lender is often difficult.

As a general rule, if the loan terms of tranches end more than 2 years apart from each other, refinancing is not normally possible.

Lenders which agree to refinance a mortgage tranche usually require a commitment that you will refinance the remaining tranches with them as well when their terms expire. The rates you receive when you refinance individual tranches may be less favorable than those you could get by refinancing the entire mortgage with the new lender.

It is a good idea to compare the mortgage rates and ask the mortgage provider of your choice if refinancing a single tranche of your mortgage is an option.

Best regards from Moneyguru

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Swiss mortgage comparison