Vacations, dental implants, car repairs; expenses on gasoline, electricity, air conditioning and, of course, the mortgage. This could be the summary of the financial daily life of each one of us and the mortgage, although listed last, is not, by far, the least important, quite the opposite. In March, 18.7% more mortgages were signed than in the previous month, 18% more than in March of last year, a figure that continues to grow and that in April has been consolidated as the highest monthly figure for 11 years. The home mortgage firm had already been on the rise for 14 consecutive months.
Seven out of ten mortgages formalized this year were at a fixed rate, according to the INE, when in 2021 they only exceeded half of the total of these financial products. In these mortgages, the fee is established when signing the contract and it is the amount that the client will pay each month, regardless of the variation of the Euribor, which, according to the announcement of the European Central Bank (ECB), is going to experience a rise imminent in order to contain the runaway inflation of recent months.
According to the forecasts of some experts, 2022 would end with the highest increase in mortgage prices since the real estate bubble: between 56 and 69 euros more per month for an average mortgage, and it is increasing. “But, you can still find mortgages at competitive fixed rates, despite the fact that the banks are not advertising them. There are options that can lead to a reduction in the installment of more than 80 euros per month, and a final saving in total interest of more than €29,000," explains Fernando López, COO of Gibobs, a mortgage advice fintech.
In any case, "the chances of finding attractive financing can improve for clients who turn to a mortgage advisor who knows which entities continue to grant them and who negotiates the best conditions with the bank," he adds. One of these financial advice platforms is precisely Gibobs allbanks, which allows us to calculate how much we could save when we apply for a mortgage, compared to the market average. Thanks to the technology it offers and the combination of personal advice, customers can access personalized recommendations for their mortgage and always find the best options for them.
How does Gibobs allbanks work to achieve these savings for its customers? “Our added value is in the years of experience that we have been negotiating with the main national banks. The platform's experts know exactly what to do to find the mortgage with the best conditions for each client, they study each case to find a tailored financial solution, and, due to the volume of operations they manage, they can get much better offers than those received by the client from a certain banking entity”, says Fernando López.
The client can make a simulation of the mortgage at no cost. And even have a totally free personalized advice service. And it is that the entire Gibobs service is completely free. There are no later payments or last minute commissions.
In addition, it works with the main financial entities in the country, such as Banco Santander, EVO Banco, CaixaBank or Banco Sabadell, among others. And another important point of this platform is the security of the financial data that the client has to share, an aspect that usually worries them. Gibobs allbanks is one of the virtual advice platforms that protects this information at all times, which is encrypted and under the security of its technological platform and with which, in no case, is it marketed.
At this point, which option do I choose, the fixed-rate or variable-rate mortgage? The answer will depend on the type of client and the risk they want to assume for the repayment of the loan. “In the second half of 2022, we anticipate that financial institutions will strengthen their variable-rate and mixed-rate mortgages and we will see that the percentage of formalized fixed-rate mortgages will decrease due to their higher prices,” explains the COO of Gibobs allbanks.
The risk of rising mortgage prices is a latent reality, so the recommendation, according to Gibobs, is: “if we are thinking of financing the purchase of the home through a fixed-rate mortgage loan, we must obtain a binding offer from the of the financial entities as soon as possible, since we do not know when these offers could be corrected upwards”.
Getting the best mortgage is not an easy task, so sometimes the best solution is to contact experts who can help us achieve the greatest possible savings. This is the average savings that could be obtained if you get good financial conditions for your mortgage: (data based on simulations carried out on gibobs.com)
Another alternative is to opt for a variable rate, since there are financial entities that are beginning to offer very attractive options. “The uncertainty of rate hikes and how far they can go, nobody knows, but a variable rate is a way to obtain cheaper financing than a fixed rate. Our recommendation is to study different scenarios of high rates and that the payment of your mortgage does not suppose more than 40% of the income in any case”, they affirm from Gibobs.
Thirdly, there is the mixed rate mortgage option, the best option when the consumer does not want to pay a high fixed rate and an alternative for those who prefer a variable rate mortgage, but with fewer risks. Some financial entities are offering rates below 1% during the first years of the loan. This allows us to pay a competitive fixed rate at the beginning and, later, expose ourselves to the risk of a variable mortgage, but with less capital and amortized interest than at the beginning of the loan.
In any case, whatever our mortgage preference, before making any decision, it is worth resorting to mortgage advice from experts such as Gibobs allbanks, who offer options at no cost to take care of our financial health and prevent us from making mistakes that follow for years. There is nothing to lose, but much to gain.
