Mortgage is getting more and more expensive. And the fault lies with the European Central Bank (ECB), which has raised its interest rates three times so far this year: from 0% to 0.5% in July, from 0.5% to 1.25% in September and from 1.25% to 2% in October. This measure, taken by the supranational entity to contain the high inflation that plagues the eurozone, has triggered the Euribor, which has made the price of variable mortgages more expensive, and has led Spanish banks to also increase the interest on their mortgage loans at fixed rate.
The data does not lie. In June of this year, before the ECB rate hike, the average equivalent annual rate or APR (a measure that includes interest, commissions and other expenses) of the new mortgages granted by the entities of our country was 1.91 %, according to the Bank of Spain. In September, on the other hand, this average APR rose to 2.36%, its highest value since May 2019. If the last increase in interest rates by the European Central Bank, carried out in October, is taken into account, it is very The price of these products is likely to continue to rise in the coming months.
Therefore, if a person is interested in financing the purchase of a home, it is advisable to contract their loan as soon as possible: the later, the higher the interest that will be applied. But which banks still offer attractive conditions? To give consumers facilities, the analysts of the financial comparator HelpMyCash.com have combed the entire mortgage market and have made a selection of the cheapest fixed, variable and mixed rate mortgages.
According to HelpMyCash, the best fixed rate mortgage for those who love stability is the BBVA Fixed Mortgage. Its interest is one of the lowest in the market: from 2.05% for a maximum term of 30 years. Of course, to achieve these conditions it is necessary to direct the payroll or pension into an account of this bank and contract home and life insurance through its mediation. Otherwise, the applied rate rises up to one percentage point.
BBVA offers to finance up to 80% of the purchase or appraisal value (the lowest) of a main residence or up to 70% of a second residence. It does not charge an opening commission, but it does apply a commission for total or partial early repayment of 2% (1.50% if more than ten years have passed since the signing of the mortgage).
EVO Banco, for its part, has the best variable mortgage, a product that is only advisable to contract if it is believed that the Euribor will fall in a few years and an increase in this index can be assumed. The loan in question is the Smart Mortgage, whose interest is from 0.99% fixed the first year and from Euribor plus 0.60% for the following. There is a bonus of 0.20 percentage points for direct debiting income and for contracting home insurance through the entity.
With this loan you can finance up to 80% of the appraisal or purchase value (the lowest) of a habitual residence, to be repaid within a maximum period of 30 years. EVO Banco does not charge an opening commission to its clients nor does it apply compensation for partial or total early repayment.
What if the client wants to have a fixed rate at the beginning and a variable rate later on? In that case, according to HelpMyCash, the best option is EVO Banco's Flexible Smart Mortgage. With this product you can choose between a fixed rate from 1.85% for the first five years or one from 2.15% for the first 15. In both cases, after this initial period, the rate will become variable: Euribor plus 0.75%.
The interest of the Smart Flexible Mortgage is subsidized by 0.40 percentage points for the direct debit of the income and the contracting of the entity's home and life insurance. This product allows financing up to 80% of the purchase of a main residence (or the appraisal value, if it is lower), with a maximum term of 30 years. Like the Smart Mortgage, it has no opening commissions or for early repayment.
HelpMyCash analysts point out, however, that the conditions of these mortgages are indicative: depending on the client's profile and the internal policy of each bank, the final offer proposed by these entities may be better or worse. For this reason, it is always advisable to request financing from several banks at the same time (at least three), as this way other options can be considered if the desired interest is not obtained.
To save time, the client can also hire the services of a mortgage broker. This professional will send your request to several banks at the same time, which will speed up the process and allow you to obtain offers more quickly. In addition, this intermediary usually obtains better conditions (lower interest, financing of more than 80%...), because he knows which entities to go to and how to negotiate.
