Blog · Mortgage market
Refinancing your mortgage: when it’s worth it and when it isn’t.
Banks are advertising refinancing again, and the statistics seem to say that one mortgage in five changes hands. That is not true, and a gap of a tenth of a percentage point in the rate is no reason to start doing the rounds of banks and notaries. Here is how to work out whether it makes sense for you.
Published: 30 October 2026 · data as of August–September 2026 · ECB, Bulgarian National Bank, Eurostat, Real Estate Consumer Credit Act, notary and Registry Agency fee tariffsOf housing loans are renegotiated each year
Not one in five — about one in twelve
Average rate on renegotiated loans
August 2026; on a new loan — 2.41%
Annual inflation, September 2026
The higher it is, the dearer today’s outlay
The time refinancing should pay back in
Otherwise it is probably not worth it
First, the numbers
Is one loan in five really refinanced?
No. The figure going round comes from ECB statistics: from January to August 2026, 21% of new housing loan business in Bulgaria was renegotiated loans. But that is a share of each month’s new deals, not of all loans. And it covers both refinancing with another bank and renegotiating the rate with the same bank.
Set against the whole portfolio, the picture is different. Over those eight months €1.03bn of loans were renegotiated, or about €1.5bn on an annual basis. Housing loans at the end of August stood at €19.33bn, according to the Bulgarian National Bank. So about 8% of the portfolio is renegotiated each year — roughly one loan in twelve, not one in five.
There is one more detail. The average rate on renegotiated loans in August was 2.45%. On a brand-new loan it was 2.41%. So on average those who renegotiate get the terms of a new loan, not better ones. The market has levelled out and the gaps between banks are small.
What it costs
What does moving to another bank cost?
Take a loan with €100,000 outstanding, originally granted for €120,000. The new bank repays the old loan, a new mortgage is registered and the old one is deleted. If you pay for everything yourself, it looks like this:
| Cost | Amount |
|---|---|
| Notary deed for the new mortgage (incl. VAT) | €565 |
| Registering the new mortgage | €100 |
| Deleting the old mortgage | €60 |
| Notarising the consent to deletion (incl. VAT) | €92 |
| Bank fees: processing, valuation, checks, deletion | ≈ €440 |
| Total | ≈ €1,260 |
Notary and state fees follow the current tariffs, converted from leva at 1.95583. Bank fees follow DSK Bank’s tariff in force from 1 September 2026 — other banks charge differently.
The good news is that your old bank cannot charge you for early repayment once you have paid at least 12 instalments (Art. 41(4) of the Real Estate Consumer Credit Act). This also applies to loans taken out before 2016, when the Act came into force — § 4 of its transitional provisions says so explicitly.
The sums
A euro today is not a euro tomorrow.
This is where most calculators go wrong. You pay the costs of refinancing today, in one go, with fresh money. The saving arrives in small amounts, month after month, over years. With inflation at 5.6%, a euro in five years’ time buys almost a quarter less than a euro today. So it is not fair to divide the cost by the monthly saving and say “it pays back in 5 years” — the loss of value has to be counted too.
Here are the sums for €100,000 outstanding with 20 years to go, at a new rate of 2.45%. We have discounted the saving at 5% a year, a little below current inflation:
| How much the rate falls | Monthly saving | You pay everything (≈ €1,260) | New bank covers notary and state fees (≈ €440) |
|---|---|---|---|
| 0.10 points | €4.87 | never pays back | after 113 months |
| 0.25 points | €12.23 | after 134 months | after 39 months |
| 0.50 points | €24.63 | after 58 months | after 19 months |
| 1.00 point | €49.92 | after 27 months | after 9 months |
Annuity payments at an unchanged rate. “Pays back” = when the sum of the savings, discounted at 5% a year, covers the cost paid today. With a 0.1-point gap the discounted savings over the full 20 years come to about €745 — less than the cost.
Our rule is simple. If the cost does not come back within 12, at most 18 months, refinancing is not worth it. Anything longer is a bet that rates and your own life will not change over the next few years. With a 0.1-point gap, which is often the gap between offers today, refinancing is a straight loss. It makes sense at a gap of around 1 point — and above all when the new bank covers the costs.
How banks work
Why does a new bank offer more than your own?
Banks are very touchy about refinancing, even though they themselves keep running campaigns for other banks’ loans. And there is a logic to it. A loan that has been serviced properly for years at another bank is a far smaller risk than a new customer with no history. That is why refinancing offers are usually the best on the market: the new bank often covers the notary and state fees in full or in part, and sometimes part of the insurance.
With your own bank it is the other way round. Renegotiating the rate there costs little — at DSK Bank, for example, it is 1% of the balance, capped at €255. The fee is not the problem. In our experience, an internal renegotiation rarely reaches the terms a new bank would give you. The bank has its reasons: if it cut every customer’s rate to the market level, it would be eating into its own income.
So our advice is not “ask your own bank first”. Our advice is: collect real refinancing offers, see which costs the new bank will cover, and do the sums with inflation. Only then, with a concrete offer in hand, is it worth talking to your own bank.
- ECB — volumes and rates on housing loans in Bulgaria: new business, pure new and renegotiated loans, 2026 (MIR, data-api.ecb.europa.eu)
- Bulgarian National Bank — monetary statistics, August 2026 — housing loans €19.328bn (in Bulgarian)
- Bulgarian National Bank — interest rate statistics, August 2026 (in Bulgarian)
- Eurostat — HICP, annual inflation in Bulgaria, September 2026: 5.6% (prc_hicp_minr)
- Real Estate Consumer Credit Act — Art. 41 and § 4 of the transitional provisions (in Bulgarian)
- Notary fee tariff and Registry Agency tariff (in Bulgarian)
- DSK Bank — tariff of fees on loans to individuals, in force from 1 September 2026 (in Bulgarian)
This article is for information only and is not financial advice. The 12–18 month rule comes from FinCity’s practice.
Want to know whether it makes sense for you?
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