The Rise in Interest Rates Sparks Surge in Demand for Fixed or Mixed Mortgages

“The normal thing is that we will see the trend of mortgage changes in the coming months and even next year as well. Because? Because there is a very high volume of people who still have variable mortgages and the review occurs once a year. And when this review occurs is when the urgency to seek this change and try to improve conditions enters us ”, has predicted the director of Mortgages of the specialized portal IdealisticJuan Villen.

Villén, explained that the demand for changes in the conditions of the mortgages is transversal: “The sharp drop in mortgages for home purchases, the result, on the one hand, of fewer home purchase transactions and, on the other hand, that the The rise in interest rates is expelling from the purchase market those people with a lower income who are not capable of affording a higher mortgage payment”.

The specialist believes that the banks will continue to be aggressive with mixed mortgage offers to their clients due to the drop in operations in the last year, and that the loan portfolio is old and if they have savings they have preferred to cancel part of their loans due to the uncertainty generated by the rise in interest rates.

Villén considers that “if what you want is to change your mortgage; In other words, if you have a variable mortgage and you want to improve the conditions, the sooner you do it, the better, because the prospect is that rates will continue to rise, even if it is not much, and it is possible that fixed and mixed mortgages are cheaper today than tomorrow”.

And he added: “If you can now switch to a 3% fixed or mixed mortgage, do it. That then the rates go down within three or four years, then you change back to a variable that is at 0.5%, if the rates are lower ”.