Interest rate hikes by the European Central Bank are making mortgages more expensive. A tighter monetary policy to deal with inflation caused the Euriborthe main index to which mortgages refer, closed October at 2.6%, a figure not seen since 2009.
In this way, the monthly payment of an average loan of 137,921 euros to be paid in 24 years, with a Euribor differential of more than one point, has become more expensive by 200 euros. What it means to pay 2,400 euros more per year.
In this context, it can be interesting change type of mortgage: if we have a variable, we pass it to fixed. This is exactly what Jose, a resident of Asturias, did last April, before the rate hike. As mentioned in Copehe managed to save 200 euros because he made the change in good time and advised by a lawyer.
Subrogation and novation: ways to transform a mortgage
There are two ways to switch from floating rate to fixed rate: by mortgage subrogation or novation. The first is to transfer the mortgage to another bank, taking advantage of the fact that the new entity offers better conditions, such as lower interest rates and improvements in commissions or contractual clauses.
The novation, on the other hand, it consists in modifying the conditions of the loan in the same bank at a time following the subscription. One of them could be the move to a fixed rate, although we must bear in mind that this involves a series of expenses for the consumer (commissions), so before doing so we must calculate whether it compensates us in our specific case.
The most extreme option for switching from a fixed to a variable rate mortgage would be the cancellation, a solution that would allow the user to contract a new one with another financial entity. However, it is usually the path that carries the highest cost. “This process can cost up to 2,000 euros more”, They warn from Asufin. And it is that, it involves the disbursement of all the expenses that the signing of a mortgage loan involves, from the commissions to the payment of the Taxes on documented legal acts.
Do fixed mortgages compensate?
Before taking out a fixed mortgage it is advisable to review the rates they offer us, since if they are 3 or 4% they can be very high and prevent us from benefiting from the change. You also have to do it be wary of offers with fixed rates of less than 2% currently, because they usually involve underwriting various life insurance policies and even investing in real estate products.
