What is refinancing?
- Refinancing means replacing an existing loan with a new and better loan
- The goal is lower interest, fewer invoices or a better overview
- You can refinance mortgages, small loans, credit cards and car loans
- It pays off when you get lower total costs or stronger finances
June 2, 2025
Julianne Gåsvær
What does refinancing mean?
Refinancing means taking out a new loan to pay off existing debt. The aim is usually to get better terms, a lower interest rate or a better overview of your finances. You can refinance mortgages, consumer loans, car loans or credit card debt.
A simple example: Do you have multiple small loans and credit cardsyou can combine them all into a new loan with a lower interest rate and one monthly payment. It provides better control and can reduce overall costs over time.
When does it pay to refinance?
Refinancing is most profitable when:
- you have a high interest rate on an existing loan
- you have several small loans or credit card debts
- you want a better overview and fewer invoices
- you’ve improved your finances and can negotiate better terms
- you have a higher property value and can achieve a better interest rate
- refinancing can also be relevant if you want to clean up your finances before you apply for a new mortgage.
How to apply for refinancing?
Benefits of refinancing:
✔ Lower monthly load
✔ Better liquidity
✔ Lower interest rates on all debt
✔ One single payment
What is loan refinancing in practice?
When you refinance a loan, you replace the old loan agreement with a new one. This is usually done through a bank or finance broker who obtains several offers for you.
Refinancing can also involve extending the term so that you have a lower monthly cost – but you should make sure that the total cost does not increase too much.
When small loans with an interest rate of 14-22% are moved into a mortgage with an interest rate of 5.24%, interest costs fall dramatically.
Let’s give you an example of refinancing where the applicant has 3 small unsecured loans and one mortgage. What happens if everything is combined into one mortgage?
👉 Disadvantages: The term is longer on small loans
so you pay far more interest in total over 25 years than if the small loans had been paid off quickly.
Before refinancing:
Monthly cost: 17.335,-
|
TYPE OF DEBT
|
AMOUNT
|
INTEREST
|
MND PAYMENT
|
RUNNING TIME
|
|---|---|---|---|---|
|
50.000
|
21%
|
1.353
|
5 years
|
|
|
45.000
|
21%
|
1.217
|
5 years
|
|
|
120.000
|
14%
|
2.792
|
5 years
|
|
|
2.000.000
|
5,24%
|
11.973
|
25 years old
|
After refinancing:
Monthly cost: 13.260,-
|
TYPE OF DEBT
|
AMOUNT
|
INTEREST
|
MND PAYMENT
|
RUNNING TIME
|
|---|---|---|---|---|
|
2.215.000
|
5,24%
|
11.973
|
25 years old
|
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FAQ - refinancing
Who can refinance?
Most people can refinance, as long as they have a good payment history and sufficient income. However, it is worth noting that some types of debt, such as student loans, cannot be refinanced.
What should I consider before refinancing?
It is important to assess whether refinancing will be profitable for you, based on your financial goals and situation. You should compare the interest rate on your existing loan with the interest rate on a refinancing loan, and assess whether the difference in the interest rate will be large enough to make it worthwhile to refinance. You should also consider any fees that may be associated with refinancing and make sure you can afford them.
How do I apply for refinancing?
You can apply to refinance through Eiendomsfinans via “start your application” at the top of the page. You will usually need to provide information about your financial situation, including income, assets and existing debts.
What is the remaining debt when I refinance?
When you refinance, you pay off the existing debt with the money you borrow through the refinance. If you choose to refinance all the debt you have, the remaining debt will therefore be zero after the refinancing has been completed.
Can I refinance loans with a bad credit score?
It may be more difficult to refinance a loan with a bad credit score, but it is not impossible. We help you apply for refinancing with a lender that offers loans to people with bad credit, but you must expect to pay a higher interest rate than usual. You may also need a guarantor to refinance your debt.
Can I refinance a mortgage?
Yes, you can refinance a mortgage. The aim of refinancing a home loan may be to get a lower interest rate, a shorter repayment period or to get a different type of loan, such as a fixed-rate loan, interest-free loan or home loan. Here you can read more about mortgage refinancing.
Can I refinance an unsecured loan?
Yes, you can refinance an unsecured loan, such as credit card debt or a consumer loan. However, it is worth noting that unsecured loans usually have higher interest rates than secured loans. Here you can also read more about refinancing unsecured loans by collecting small loans
What happens to the interest rate when I refinance?
The interest rate depends on:
Type of loan (mortgages have low interest, small loans high)
Security (mortgages in homes give lower interest rates)
Ability to pay and credit score
The bank’s risk assessment
Competition in the market
When refinancing, the bank makes a completely new assessment of you and the loan – that’s why the interest rate may be different from the old loan. You shouldn’t refinance if you don’t get a lower interest rate, improved finances or better terms.
What costs can come with refinancing?
Establishment fee: The bank usually charges a fee for setting up the new loan. The cost can vary from a few hundred to several thousand kroner, depending on both the bank and the loan amount.
Registration fee: When refinancing a mortgage, the new loan must be registered with the Swedish Land Registry. For private individuals, the registration fee in 2025 is NOK 545 (see the Norwegian Mapping Authority’s price list here).
Term fee: Most banks have a fixed monthly fee for administering the loan, usually in the range of 30-70 kroner per month.
Fee for early repayment: If you have a fixed-term loan, such as a fixed-rate mortgage, there may be extra costs if the loan is repaid before the agreed time.
Can I refinance several loans at the same time?
Yes, this is one of the most common reasons why people choose to refinance. It’s also often referred to as debt consolidation, or adding debt to your mortgage. You apply for a new, larger loan to pay off all your existing small loans and credits.
Can refinancing affect my credit score?
Yes, with a lower interest rate on total debt, it strengthens the calculation of your liquidity (your ability to pay for yourself). It is also positive with few debt items.
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