Banco Santander and Mapfre launch a reverse mortgage for people over 65 with interest starting at 5.99%

Santander Bank y Mapfre agree to enter the reverse mortgage market, launching a new product designed to people over 65 years oldbut especially for those who over 75 years of age. These types of products have the objective of helping retirees obtain a monthly income from their home ownership and in this way, complement what they receive as a pension.

The main feature of this loan is that it has a interest that will leave from 5.99% at a fixed rate, and that the heirs will have to be duly informed, because upon the death of the owner, they will face the outstanding debt. Your marketing will start from this November 20, 2023 for a first phase, which has been called ‘pilot’ with its offer in 228 Mapfre and Santander offices located in Madrid.

How does the Santander and Mapfre reverse mortgage work?

Las reverse mortgages They are a loan that allows people over 65 years of age to receive money monthly, putting their primary home as collateral. In this case, Mapfre and Banco Santander focus this new product on those over 75 years of age, granting a loan that is estimated according to the life expectancy of the holder, and to which a fixed amount of money is deposited monthly. The obligation falls on the heirs to return the amount borrowed along with the interest that decreases as the years go by.

The Santander Mapfre reverse mortgage, allows two modalities: with and without annuity.

• With life annuity: It guarantees the monthly payment of the installments until the last owner of the home dies because when the mortgage is contracted it is done together with a life annuity product with Mapfre Vida. The premium is returned to the heirs in the event that the beneficiary dies before being able to enjoy the income.
• No annuity– Monthly payment is guaranteed for the life expectancy of the customer. That is to say, if the holder lives longer than expected, he will stop receiving the fee when he exceeds the estimated age.

Santander-Mapfre reverse mortgage requirements

Los main requirements In order to take out the new reverse mortgage from Banco Santander and Mapfre, they relate to the client and especially to the home they own. This must be Free of charge (debts) and located in an area where it can be sold quickly and limited ‘to price volatility’. Elderly people must be the owners and live regularly in the house. It also establishes a sale value which cannot exceed housing, which in this case, for the first pilot test in Madrid, will be 200,000 euros.

As for the conditions that have to do with the owner of the home, they must have an account at Banco Santander. For this, the direct debit of the pension or contracting other products will not be required. Although it does not have opening commissions, there are two expenses that are borne by the client, such as the independent advice required by law and the appraisal of the property. In the first case it is about 484 euros and in the second, around 300 euros.

How is the reverse mortgage repaid?

The person who retires and signs a reverse mortgage is not responsible for returning the loan money, but rather the heirs will be. As the years go by, the fee to be returned is decreasing, and when the owner dies, his heirs can choose between paying the debt to keep the property or selling and paying off the loan with that money. They could even take out a new mortgage in order to pay the missing money.

In addition, a reverse mortgage can be canceled at any time, without having to wait for the term to expire, and even the majority of banking or financial entities that offer these products do not charge commissions for the advance payment of this type of mortgage. loans.