The euribor It has broken a six-year streak with its negative price levels, since February 2016, and closed April at 0.013%, that is, with a positive monthly average. This rise will undoubtedly affect your mortgage to a greater or lesser extent.
With an index rise like the current one, which has risen about half a percentage point in the last year, it can be a increase in mortgage payments which would be between 170 and 350 euros per year. The largest amounts can register increases of even 600 euros. That is, between 14 and 29 euros per month. The final amount will always depend on the review schedule of each mortgage and the differential that each citizen has committed to their bank, as well as the type of mortgage loan, whether it is fixed or variable.
Given this situation, it is normal for us to wonder what is going to happen now with mortgages and if it is better to have a fixed rate or a variable rate, and even if it is a good time to change mortgage or bank.
With the rise in the Euribor, banks have made mortgages more expensive. Especially the fixedbecause the bank is more interested in signing a variable, with which it will earn more money in a scenario of rising Euribor and, predictably, interest rates in the remainder of the year.
That is why, in principle, fixed-rate mortgages are the more interesting for your pocket and are the most common at the moment.
Banks are already noticing a growing interest from mortgage holders to modify financing conditions and thus avoid rate hikes.
According to HelpMyCash, with the positive Euribor, the variable loans contracted between 2011 and 2015 will become more expensive than the average fixed mortgage.
Thus you must take into account that to get a cheaper loan you can go from variable to fixed interest by negotiating with the bank (novation) or changing the entity (subrogation). You can also cancel your mortgage and contract another one with better conditions. Each one has its advantages and disadvantages, in addition to different commissions.
The best is that go to your bank or another entity and make accounts of what is best for you and thus make the best decision for your pocket.
According to the Idealista portal, now is the best time to change from variable to fixed mortgage. These are the three methods to change.
Novation
It is the modification of the initial conditions of the mortgage that allows you to renegotiate the contract. It is one of the most recommended options if all we want is to change the variable mortgage to a fixed one. You just have to contact the bank and let them know our intention. The bank will study the case and decide whether or not to carry out the changes.
If we make the change through novation, the commission it is 0.15% during the first three years of the mortgage. When this period ends, the commission disappears.
Subrogation
The subrogation of the creditor consists of cchange the mortgage to another bank, that is, that the debt we have with one entity passes to another. This case usually occurs when we compare different mortgages and find a bank that offers better conditions than ours. With the new bank, new conditions are defined, so you can switch to a fixed mortgage without any problem.
The commission by subrogation of the creditor is the same as that of the novation: 0.15% during the first three years and the disappearance of the same when they end. In addition, a cost is charged for the appraisal of the home, which is usually between 300 and 600 euros, depending on the home.
Cancellation and contracting of a new mortgage
It is also possible to close our mortgage and open a new one in which we establish a fixed interest rate. This option is usually recommended if, in addition to changing the type of mortgage, we want expand it. Canceling the old mortgage can involve a cost of up to 1% of the price of the same, to which must be added the taxes related to the new mortgage.
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