Fixed rate home loans, why are they the most popular these days? – CVBJ

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12/21/2021 at 10:15 am CET

VERONICA SEDEÑO

The home sales market has experienced significant growth in recent months. From Creditoh !, the fintech specializing in mortgage advice and the intermediation of financial products intended for end customers via its platform, they stress that “the pandemic has boosted the & rdquor; sector. And this is reflected in the data from the INE, since the number of Mortgages The registrants until August in the land registers were 33,105, that is to say 66.9% more in annual rate and the average amount of these mortgages increased by 1.9% and currently stands at 137,885 euros.

In this sense, in addition, there is a change of trend and fixed interest predominates in new mortgages, with 67%, while only 33% was variable rate. This contrasts in particular with the data from previous years: in 2020 the fixed rate represented 45.7% and the variable rate 54.3%. In 2019 the fixed rate occupied only 40% and the variable rate 60%.

Better credit conditions

The main financial institutions have launched new and attractive fixed rate mortgage products. The variety of the banks’ offer generates competition between them and allows customers to obtain better conditions on their mortgage loans.

“Today’s data the average amount of interest paid on a mortgage is around 2.5%, but we know that in the market there are offers for standard 1.25% client profiles, so if you are dedicated to finding the mortgage that really matches your characteristics, you can save a lot of money. money & rdquor ;, explains David Crespo, founder of Creditoh.

Benefits of fixed interest

In the fixed rate mortgages, the interest rate paid throughout the term of the to lend It’s the same thing, it gives the person signing the mortgage peace of mind and certainty about all the disbursements they will have to make during the agreed time since each month they will pay a constant appointment.

Is it possible to change a mortgage from variable to fixed?

If it’s possible. Change can be done in two ways: on the one hand, there is the novation, which consists of continuing with the same financial entity with which we have the mortgage simply by modifying certain conditions.

On the other hand, there is the surrogate mother: in this case, the bank is changed, thus improving the previous conditions. Both options entail a series of expenses which must also be evaluated.

Mortgage commissions and repayments

Some banks have directly reduced or eliminated the commission for opening your mortgage at a fixed rate, but there are still others that preserve it. The same is true for prepayment commissions.

The new mortgage law makes amortization commissions very even, although it must be taken into account that taking out a fixed rate mortgage may incur an interest rate compensation commission. This commission is not applicable to a variable interest rate.

This is a commission that could be paid in the event that the bank suffers a loss at the time of the amortization partiel. “The advice when hiring is to negotiate it beforehand and in the event that we have to assume this commission, before making any reimbursements, ask the bank if the reimbursement that I wish to make involves a penalty. It is regulated by the new mortgage law, so the bank will have to provide us with this information before the partial amortization & rdquor ;, they conclude from Creditoh.

It should be noted that before opting for a mortgage It is advisable to consult the professionals of the sector and obtain adequate advice in order to obtain the best personal conditions.


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