Hiring a good fixed mortgage is still possible even if the bank makes it difficult for you

It is an open secret that Spanish banks are currently trying to direct customer demand towards contracting variable mortgages.

Thomas Osborne
Thomas Osborne
05 July 2022 Tuesday 10:05
20 Reads
Hiring a good fixed mortgage is still possible even if the bank makes it difficult for you

It is an open secret that Spanish banks are currently trying to direct customer demand towards contracting variable mortgages. This commercial strategy has a reason for being: the drastic rise in Euribor, with which the interest on these loans is calculated. The reference index has been on the rise for six months and will close the month of June with a value close to 1%, the highest since August 2012. If, as everything indicates, the forecasts come true and the Euribor continues its unstoppable rise in what For the remainder of the year, banks will obtain a much higher profit margin as interest on variable-rate loans rises.

At the same time, they have been worsening their fixed mortgages for months, whose interest does not depend on indices such as the Euribor. By making them more expensive, Spanish banks hope that customers will see them as an unattractive option and opt for the variable rate. However, according to the financial comparator HelpMyCash.com, contracting a fixed mortgage is still a good alternative, not only to avoid future rises in the Euribor, but also because it is still possible to find reasonable interest rates that allow you to pay stable and affordable installments.

HelpMyCash analysts point out that the interest on a fixed mortgage is a constant value that never changes, no matter what happens with the Euribor. In other words, if the Euribor continues to rise, as is expected to happen, those who have signed a loan of this kind will continue with the same fee as when they formalized their contract.

This stability is especially valuable at a time like the present, with a rising Euribor and skyrocketing inflation (10.2% in June, according to the National Institute of Statistics) that "eats" a large part of the income of citizens. The security of always paying the same has convinced the vast majority of those mortgaged in 2022: since February, which is when the Euribor began to skyrocket, more than 70% of mortgage loans formalized in Spain have been at a fixed rate, according to data of the INE.

But it would be of little use to always pay the same if the fee was too expensive. Fortunately, there are still fixed mortgages with interest of around 2% or less. Although they are higher rates than those offered at the end of last year (less than 1.50%), they are still competitive, especially when compared to the loans at more than 3% or 4% that were granted a few years ago. four or five years.

Openbank's Open Fixed Mortgage, for example, has one of the lowest interest rates on the market: from 1.92% if the customer directs their income, takes out home insurance with the bank and requests an amount of at least 150,000 euros . BBVA's Fixed Mortgage also stands out, with a rate from 1.95% in exchange for the applicant directing their salary and signing the entity's home and life insurance.

From HelpMyCash they remember that these interests are higher than those of the current variable mortgages, whose average rate is around Euribor plus 0.90%. Now, as the forecast is that the Euribor exceeds 1% or even 1.50% in the next year or year and a half, it is very likely that a fixed mortgage will end up costing less than a variable one if the Euribor remains on the ground positive and up.

It is very likely, however, that banks will raise their fixed rates in the coming months. In fact, it is what they have been doing since February to promote the contracting of their variable-rate mortgages. In parallel, the entities have also reduced the spreads of these second products (which is added to the Euribor to calculate the interest) with the aim of making them more attractive.

To avoid this more than probable rise in rates, it is advisable to take out a fixed mortgage as soon as possible. If you want to save as much time as possible, entrusting the request to a mortgage broker can be a good option: this professional will send the client's request to several banks at the same time and will negotiate with them to obtain the best possible conditions. The HelpMyCash website explains how brokers work and how you can contact one of them.