Strategies to Obtain an Affordable Mortgage Despite Rising Interest Rates and Inflation

Despite rising interest rates and inflation, it is still possible to get an affordable mortgage – you just have to follow the right strategy.

Difficult times for those looking for a mortgage to buy a home? It depends on. The economic situation is certainly not the best. With interest rates rising over the past year, meeting deadlines has become impossible for many. But precisely in those moments, by perfecting your ingenuity, you will also be able to close excellent deals with banks. The first commandment is: do justice. as? Let’s find out together.

hypothesis: A mortgage is generally considered sustainable when the payment does not exceed 30-35% of the salary. But with the significant increase in premium amounts for variable rate products recorded in the last period (doubling in many cases!), this relationship is now completely imbalanced. Because while the prices of goods and services have increased, as have premiums, salaries have always remained the same (at best). Below we offer you a series of practical tips and tricks to save up to €500 on your premium.

How to reduce your mortgage payment

Holders of variable rate mortgages have different options to save on repayment. The first is Renegotiate the same mortgage, Which, as of January 1, 2023, banks must guarantee clients without investigation or evaluation costs. The rule applies to mortgage loans that do not initially exceed 200,000 euros and to holders with an ISEE of less than 35,000 euros at the time of application, and in the absence of late payment of the installments.

The mortgage renegotiation deadline is set for December 31, 2023 and applies to contracts entered into (including assumption) before 2023 for the purchase or renovation of residential units. Renegotiation allows you to go from a variable rate mortgage to a fixed rate mortgage.

Another important possibility is mortgage solutions., that is, the transfer of an existing loan from one credit institution to another without costs for the client, who can then choose more advantageous contractual conditions. The new bank will bear all subrogation costs and may also change the remaining term of the mortgage and/or type of rate. Or you can choose to suspend the mortgage for up to 18 months, but this is only granted for serious and documented health or work reasons.

There are also many tricks to facilitate mortgage management. If we have several active loans, we can ask a credit institution to consolidate all debts So that you have a monthly payment without the risk of forgetting to pay one or more, and above all, saving you interest. Furthermore, it is good to follow the performance of financial markets even if we are not familiar with the subject.

At a minimum, it is advisable to know how to match the spread, Eurirs (or Irs), Euribor and Taeg, to take advantage of the most favorable opportunities at the right time. And be careful with the costs of insurance policies: the suggestion is to read and request different quotes from various companies before deciding who to contract the mandatory policies from. If you are not experiencing significant financial difficulties, you can select a payment plan to pay off your mortgage faster and save on interest.