Mortgage loans: bread for today, hunger for tomorrow

August 15, 2019 0 Comment

You really have to think about it long before taking out mortgage loans, given that a product purchased today, in the next 20 or 30 years, can become an unpaid debt. According to official measurements, in October 2008 the Credimash climbed to a maximum of 5.52%; added to more accessible differentials than the current ones, it implied default risks. However, at this time the situation has turned: the indicator is located at 0.54% but interest is around 2.5%.

Interest increase risk

Interest increase risk

Making calculations, these numbers hide a potential future trap, because the average quota of a mortgage of 150 thousand euros at 25 years with a differential of 2.5% would be 711 euros taking into account the current Credimash, but with an indicator of 4% the fee would rise to 1012 euros. Thus, mortgage loans that seem convenient today are likely not to be so good tomorrow. Given the risk of increased interest, some buyers prefer to find out for fixed-rate mortgages; However, these are not exactly the most convenient. 

Online banking demands less bonding

Online banking demands less bonding

If you still want to find a mortgage with this uninviting scenario, you should consider that online banking is the one that demands the least linkage. This is the market that requires less conditions to access mortgage loans. Thus, OutBank has launched the “Orange Mortgage”, which finances up to 80% of the value of the property plus receipts, home insurance and direct debit, with a differential of 2.69%. For its part, the Openbank “Open Mortgage” covers a maximum of 70% with a rate of 2.5%. Another proposal that is circulating on the web is the “Medfic bank”, which starts from 2.25% although with a floor of 3%.

Better financing conditions

However, the most attractive offers are for apartments in the hands of banks, because financial institutions need to get rid of their portfolio of properties and therefore offer them with better financing conditions. For example, Santander bank proposes mortgage loans that cover 100% of the house price, with terms of up to 40 years and a competitive differential of 1.75%. If we have to finally mention the offers of traditional banking, at this moment the most affordable option is that of Bankinter, with its “Variable Mortgage”. The differential is attractive -1.95% – but the maximum financing time is 30 years.

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