The mortgage war is back. Since the end of last year, but especially since the beginning of the current year, financial institutions have begun to reduce the price of their loans to purchase housing almost universally. Especially the fixed rate ones, which are once again becoming the attraction of banks to attract clients when they seemed once again condemned to ostracism.
Miquel Riera, mortgage analyst at HelpMyCash, assures that since the start of the year “we have detected reductions in the fixed rate offers of Coinc, Bankinter, Unicaja, Banco Sabadell, Imagin, MyInvestor, ING, Evo Banco, CaixaBank and Cajamar.” Idealista has also noted improvements in the prices of these products by Openbank (Santander) and Ibercaja. Entities such as Sabadell (2.8%), BBVA (2.9%) or Evo (2.9%), offer fixed mortgages at an interest rate (TIN) of less than 3% – although their APR, which includes that interest more Other expenses charged by the entity overcome that barrier. Others such as Openbank (3.1%) or Targobank (3.15%) also offer interests close to that 3% barrier.
These are, in any case, official prices given that, in some cases, the mortgage advisor iAhorro assures, “we are seeing fixed-rate firms at 2.7% and 2.8%, a very good TIN.” Claudia Monge, mortgage expert at the real estate services company Casavo, goes further and assures that “we are even seeing cases in which this rate is reduced to up to 2.55% for certain profiles, although the general adjustment is between 3.3% and 2.9%”.
Reasons
Behind this movement of the entities there are, according to analysts, two reasons: the expectation of an upcoming reduction in interest rates by the European Central Bank (ECB) – although it has now cooled somewhat – and the banks’ objective to revive the ailing mortgage market, in low times especially since the second half of last year, as highlighted by the online product comparator Kelisto.
As Riera recalls, “it is expected that the ECB will reduce its interest rates this year, probably in the summer. Financial entities, therefore, anticipate that it will cost them less to finance themselves and believe that they have room to lower their fixed mortgages and maintain their profits. “, Explain. “Entities have gained momentum in lowering rates in order to attract new customers by lowering the price of their offers, especially in fixed-rate mortgages, seeing how some banks are offering rates below 3%,” Sergio Carbajal seconds. , head of Rastreator’s mortgage area. A rate drop would also reduce the income from the variable mortgages of the entities, which are very aware of the long period of negative rates that significantly reduced their income and forced them to cancel the fixed mortgages.
The financial sector’s interest in reviving the mortgage sector is more than justified. As iAhorro reminds us, “the mortgage is the main source of customer acquisition for banks, so they are always interested in moving their products to make them attractive.” Riera adds in this regard that the mortgage market is not going through its best moment since, as he recalls, “in 2023 fewer mortgages were granted than in 2022 and 2021, largely because they became more expensive after the rise in the Euribor and interest rates. European Central Bank. Probably, by now improving their fixed rate offers (and also mixed rate), they hope to attract more clients and increase contracting,” says the HelpMyCash expert.
Mixed loans
Despite the improvement in the conditions that entities are offering for fixed mortgages in recent weeks, both iAhorro and Casavo agree that mixed loans have been the kings of the market in recent months. “Despite this improvement in the fixed rate offer compared to 2023, mixed mortgages remain the most popular, as clients want to take advantage of lower rates in the first years,” explains Monge. Rates that, according to iAhorro, can be below 2% in some cases.
The emergence of these products, however, has not managed to overtake fixed mortgages as was predicted a few months ago. “The reason why fixed mortgages are not as “dead” as they seemed is none other than the security and certainty that they continue to offer in a context of constant economic fluctuations,” says Monge. “Fixed mortgages are by no means dead. The client is still actively looking for fixed mortgages in part because we are coming from strong increases in the Euribor and that necessarily makes the average consumer demand more security than ever,” they agree to highlight from Kelisto.
The latest INE statistics on this market reflect the strength of fixed mortgages. Although in November they reached their lowest point for two years, they continue to represent more than half of the loans signed for home purchases at 53.2%. Far, however, from the maximum they reached in July 2022, when they represented 77% of the new loans that were signed that month.
Although the improvement in mortgage market conditions that is being seen should be good news for those who want to buy a home, the reality is that it also entails complications. With the perspective of a drop in interest rates in a more or less near horizon but with the banks also tightening their grip on fixed rates, the reality, as Sergio Carbajal explains, is that it is difficult for many to know where to go right now. to choose a mortgage. According to a Rastreator study, 79% of those surveyed believe that the current state of mortgages complicates the decision about what type to choose and what conditions are the best, making it more confusing.
2024-02-18 04:56:56
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