The mortgage market is showing some small variations with the beginning of the new one, where fixed rate mortgages are the ones that are developing the best performance in this period. While on the contrary, those constituted at a variable rate are reflecting the increase that is taking place in the European benchmark, the Euribor. To the point that it is climbing positions since it hit the all-time lows about twelve months ago. With a growth in its spreads that is promoting more demanding monthly payments from now on.
The latest official data show that for mortgages constituted on the total number of properties, the average interest rate at the beginning it is 2,61% (5,7% lower than the previous month) and the average term of 23 years, according to the latest report from the National Institute of Statistics (INE). Where it is also found that 64,0% of mortgages are at a variable interest rate and 36,0% at a fixed rate. The average interest rate at the beginning is 2,42% for variable rate mortgages (0,7% lower than in the previous month) and 3,07% for fixed rate mortgages (14,1% more under).
As a consequence of this conjunctural moment, banks are picking up the new trend that marks the mortgage market in Spain. With a variation in interest rates in this class of products, and where it is manifested that from now on it will be more profitable take out a fixed rate mortgage rather than a variable one. With the surprise that there will be no surprises of any kind to face your payment because the monthly fee will always be the same, without variations. Whatever happens in the financial markets and therefore will give greater peace of mind to the applicants of this financial product.
Bankinter moves tab
This bank is one of those that has moved positions in the offers it offers to its clients. In this sense, it has implemented that the reduction in the price of the fixed mortgage for a term of 20 years is of 36 basis points on the interest rate applied so far. While on the contrary, the bank maintains unchanged its prices and conditions in the variable modality. This action can cause a change in the habits of people who are going to buy a home from now on. With a variation in the spreads of this type of financing for real estate purposes.
Bankinter begins the 2019 business year with a substantial reduction in the interest rate of its fixed-rate mortgages and in the fixed section of mixed. This is a reduction that, although it reaches all terms, is especially significant for mortgages with a 20-year term, one of the most demanded by customers, whose interest rate will be 1,99% from now on compared to the previous 2,35%, which represents a reduction of 36 basis points.
With interest of up to 2,40%
With this new movement, Bankinter's fixed rate mortgages would be as follows: 1,65% at a 10-year term; 1,90% for a period of 15 years; 1,99% within 20 years; in 2,30% at 25 years; and at an interest rate of 2,40%, for a maximum term of 30 years. As for the mixed rate, which are made up of a fixed rate period and, later, a variable interest rate until the end of the term, they would now stand at 1,90% for the 10-year term; 2,20% for 15 years; and 2,30% for the term of 20 years. The differential in the variable tranche will continue to be, as up to now, 0,89%.
The aforementioned prices in the fixed rate mortgages of this bank are available to customers who combine the mortgage with the contracting a product package: contracting a Payroll Account, Professional Account or Non-Payroll Account (all of them remunerated with an APR of 5% the first year and 2% the second year up to a maximum of 5.000 euros), contracting a life insurance for 100 % of the loan amount, home insurance and a pension plan or EPSV with Bankinter Seguros de Vida, contributing a minimum annual amount of 600 euros and keeping it in force during the term of the loan.
They keep the same commissions
Regarding the commissions applied to these mortgages they remain the same that the bank has established for a long time for this modality: opening commission of 1%, with a minimum of 500 euros and a withdrawal compensation for partial, total and / or subrogatory amortization of 0,5% in the first five years of life and 0,25% thereafter, in addition to an interest rate risk compensation of 0,75% that is applied only in the event that the early cancellation generates a capital loss for the entity.
However, the general trend in the banking sector is that commissions go away increasing in the coming months and in a progressive way. In particular, mortgages linked to variable interest rates. In a few tenths of a percentage compared to your current rates or at least from just a few months ago.
Variable mortgage at 0,89%
With regard to variable rate mortgages, this financial institution continues to maintain the same price and conditions since the beginning of October last year: a nominal interest rate fixed during the first year of 1,50%, and from that date: Euribor + 0,89%. On the other hand, both variable and fixed rate mortgages can be contracted under the “no-more mortgage” modality that includes, by contract and without any additional cost, the dation in payment.
This factor implies that in the event of non-payment of the debt, the mortgage holder would respond solely and exclusively with the asset taken as collateral, which in that case is the mortgaged home itself. Individuals residing in Spain with monthly income over 2.000 euros, and whose destination of funds is the purchase of habitual residence. In what is constituted as one of the new formats that are beginning to be developed with the new year. Beyond other technical considerations that are taking place in a banking product so demanded by Spanish users.
Very high home prices
According to the seventh edition of the ING Home and Mortgage Survey “Is House Prices Too High?” 63% of Europeans believe that house prices will continue to rise in the next 12 months. In addition, more than a third of those surveyed do not believe that they can become a homeowner. This report shows that in general, house prices are linked to and influenced by local market conditions. However, many European citizens, regardless of the country, think that the house prices where they live are too high.
57% believe that housing is expensive, and a quarter (21% in the Spanish case) have difficulty paying their rent or mortgage each month. At the European level, tenants are more likely than landlords to define homes in their country as expensive (62% vs 55%) or unfair (32% vs 22%).
Change in interest rate trend
For the past decade, interest rates have been low, which has helped drive home prices up while making it difficult for new homeowners to come in. In this sense, 72% of the Europeans surveyed, 80% in the case of Spain, believe that it is difficult to acquire a home for first-time buyers. The majority (65% on average in Europe compared to 68% in Spain) point out that this circumstance has worsened since 2015.
Where one of the biggest is accessing mortgage loans that cover the high prices that flats in Spain maintain. Beyond the differentials applied by the banks, as well as the commissions and other expenses in the management that carry these basic necessities among Spanish families.
Although of course it seems that variable rate mortgages will not show the differentials of previous years. As a result of the change in trend that has occurred in the European benchmark. To which more than 90% of variable rate mortgages are linked, according to data provided by the National Institute of Statistics (INE). Not surprisingly, users are already noticing an increase in their monthly fee in their pockets in recent months.
According to the seventh edition of the ING Home and Mortgage Survey “Is House Prices Too High?” 63% of Europeans believe that house prices will continue to rise in the next 12 months. In addition, more than a third of those surveyed do not believe that they can become a homeowner. This report shows that in general, house prices are linked to and influenced by local market conditions. However, many European citizens, regardless of the country, think that the house prices where they live are too high.