Buying a home is a very difficult decision to make, especially considering the current state of these loans. With Euribor hanging around 4.18% And European Central Bank raise interest ratesApplying for a mortgage has become quite an adventure because You don’t know how much interest you have to pay. Looking back, we see that the indicator has grown significantly since then. 2.629% to current values that do not cause a decrease from a year ago 4% since June.
Price inflation doesn’t work either mortgages. Many factors contribute increase in housing prices and now they’ve all come together to create the perfect cocktail for their exorbitant numbers. Normally payment is made through a mortgage loan and this is perhaps the most complex decision to make. There are three options: fixed, variable or mixed. Among these two, there is one that stands out the most and is preferred by Spaniards.
The trend has changed
Traditionally variable mortgages were preferred by Spaniards until a few years ago when buyers decided on fixed mortgages. However, the rise of Euribor caused this trend to change. Director of iAhorro, Marcel Beyerexplained which type of mortgage is most commonly taken out now: “We saw how hybrid mortgage variable exceeded “It even dethroned the Spanish-favored fixed mortgage until November 2022.”
This type of mortgage combine the two As mentioned above, the mortgage lender negotiates its terms with the bank. Generally, you choose to have a fixed mortgage in the early years and then the model is reversed to pay the amount Euribor is showing at that time plus a small difference. Buyer Confident that Euribor will fall in the future and benefit from this decision.
In November last year, a real trend change began to be seen in companies. In that month, 24.14% of Spaniards signed a mixed mortgageThe rate of those who prefer fixed and variable is 66.21%. 9.66%. It rose to represent 35.78% of the total in December and continued to grow until it reached: 73.10% in August.
Why are these mortgages successful?
“The first fixed part of the hybrid mortgage, which usually lasts a long time,” says Marcel Beyer. Between 5 and 15 years It has a very low Nominal Interest Rate compared to a fixed mortgage, depending on the bank, and moreover, until the second part of this mortgage Euribor will not affect monthly payment”. Additionally, if Euribor becomes high over time, you can prevent your quota from increasing by expanding this system.
Beyer also said, “In the first quarter of 2024, banks will most likely Revise interest rates upwards Reducing mortgages, with very few exceptions, because the European Central Bank has already announced this for next year. will continue to rise interest rates Authorities aim to reduce inflation. “For this reason, no one who owns a house should expect to get a mortgage,” he said. This is another reason why mixed mortgages remain a favorite among Spaniards, at least for now.
What might happen in the future?
Thanks to the latest decision of the European Central Bank, mortgages will finish the year with a decrease in loan interest rates, as can be predicted. The organization announced this week that it will keep interest rates at 4.5% until at least the end of the year. The ECB is thus halting its sustained rise in 2023 and thus proposing a new scenario for all Member States that will finally give them a break after several unusual months.