The European Central Bank has announced that the interest rates have stopped growing after a year in which only high values were recorded. This will cause the Euribor to end up falling in the long run, but for the moment, very high interest rates are estimated. Currently, it marks 4.18%, when a year ago it was at 2.629% and from June does not drop below 4%.
Buying a house is a very difficult decision to make, taking into account the current situation of mortgage loans. Applying for a mortgage has become quite an adventure because You don’t know how much interest you will have to pay. Price inflation doesn’t help mortgages either.
Numerous factors contribute to the rise in housing prices and currently they have all come together to create the perfect cocktail for them to reach exorbitant numbers. As normal, payment is made through a mortgage loan and, perhaps, this is the most complicated decision to make. There are three options: the fixed, the variable or the mixed. Between these two there is one that stands out above all and which is preferred by the Spanish.
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A new trend
Traditionally, the variable mortgage has been preferred by Spaniards until a few years ago, when buyers decided on fixed mortgages. However, the rise in the Euribor has caused a change in this trend. The director of iAhorro, Marcel Beyerexplained what type of mortgage is most commonly taken out currently: “We have been seeing how the mixed mortgage has surpassed the variable and has even dethroned the fixed mortgage, which was preferred by Spaniards until November 2022.”
This type of mortgage combine the two mentioned above and the mortgagee negotiates its conditions with the bank. Generally, in the first years you choose to have a fixed mortgage and later the model is reversed to pay what the Euribor indicates at that time plus a small differential. The buyer He is confident that the Euribor will go down in the future and benefit from that decision.
In November of last year we began to see a change in real trend in firms. In that month, the 24.14% of Spaniards signed a mixed mortgagecompared to 66.21% who prefer fixed and variable 9,66%. In December it rose to represent 35.78% of the total, and continued to grow until reaching 73.10% in August.
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The triumph of these mortgages
Marcel Beyer says that “the initial fixed part of the mixed mortgage, which usually lasts between 5 and 15 years depending on the bank, has a Quite low Nominal Interest Rate compared to the fixed mortgage and, furthermore, until the second part of this mortgage the Euribor will not affect the monthly payment.” Furthermore, if the Euribor is high over time, you can choose to extend this system and thus avoid increases in your quota.
Beyer has also hinted that “in the first quarter of 2024, banks will most likely review interest rates upwards of their mortgages, with very few exceptions, because the European Central Bank has already announced that over the next year will continue with the rise in interest rates officials with the objective of reducing inflation. Thus, whoever has the home should not wait to get a mortgage.” This is another reason why mixed mortgages will continue to be the favorites among Spaniards, at least for now.
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2024-01-03 08:46:58
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