There’s never a perfect time, they say, but timing still matters when buying a home and securing a mortgage. A signature mortgage ranks among life’s most important decisions, so it’s worth weighing when to act for both personal and real estate goals. Beyond the savings a lender can offer on the loan itself, the broader economic climate shapes bids from lenders and the terms they present. The moment you sign can influence not just monthly payments but the overall cost of the loan in a changing market.
So, when is the best moment to buy a home and apply for a mortgage? Realistically, the most favorable window was already in the past. The year 2021 saw Euribor at historically low levels, making mortgages cheaper than ever with interest rates dipping under 1%. Since returning to that peak cheapness is unlikely, the question becomes whether it makes sense to act now or wait a bit longer into 2023 for a potential shift in rates and terms.
To deliver a clear assessment, three key factors are considered: the current and anticipated macroeconomic environment, the lending practices of banks, and the needs and capabilities of borrowers.
“Interest rates will continue to rise”
iAhorro, a mortgage comparison and advisory firm, notes a cautious outlook. Its director of mortgages explains that in the coming months, conditions may tighten. The idea is straightforward: signing sooner can be advantageous, whereas delaying could lead to higher costs if rates climb. If Euribor trends upward, banks will adjust their pricing to reflect the higher benchmark, suggesting a tougher environment for borrowers. The ECB has already signaled ongoing rate increases and projects a rise that could push policy rates toward higher levels in the coming months, which in turn influences bank offers.
Inflation remains a challenge, affecting savings ability and everyday living expenses. Banks have grown more selective about new mortgages, carefully evaluating a borrower’s financial health to avoid loan defaults. Yet the same institutions continue to seek solid borrowers who meet income and employment stability criteria, underscoring that a qualified, financially steady applicant should not be left waiting for a loan. The core message is that strong applicants with dependable salaries and stable jobs will still find access to mortgage credit, given appropriate savings for the down payment.
Banks are targeting results
A second reason not to delay is that the third quarter often brings tighter lending as banks chase annual targets and refine rates to retain customers. Banks, like any business, set goals such as issuing a certain number of loans each year. If targets are within reach, the pace of offers can accelerate; if not, late-year dynamics can shift in an applicant’s favor as lenders push for volume in the final months.
There are, however, two complicating factors this year. First, lenders kicked off the year with strong mortgage activity and record-setting offers, potentially exhausting some targets earlier than planned. Second, with policy rate increases, the odds of negotiating a rate below the benchmark have grown more uncertain. The Euribor has fluctuated, which adds another layer of complexity to pricing for new loans.
Holidays can slow the process
January is often tougher for mortgage signings due to December holidays and the way processing timelines stack up. A deal signed in January may take longer to close, because preparations started months earlier. If there’s a need to finalize a deed before the new year, acting promptly is wise, or consider enlisting a mortgage counselor to navigate the steps and keep the timeline on track.