Updated Friday, October 22, 2021 – 12:00
Mortgage loans have never been as cheap as they are now. However, it is important to keep a few keys in mind to ensure that you pay as little as possible for that mortgage.
Mortgage loans have an average price of between 1.55% and 1.75% APR.
Mortgage loans to purchase a home have never cost so little, according to the Bank of Spain. So far this year, its average price has been between 1.55% and 1.75% APR, which are the lowest values recorded by this body. Taking out a mortgage, therefore, can be very cheap these days, but how can a client make sure to pay as little as possible? From the banking comparator HelpMyCash.com they recommend look for a credit with a reduced interest, do not contract expensive additional products and establish a adequate repayment term.
1. Look for a low-interest mortgage
How can you check if you check the amortization table of a mortgage, the monthly installments paid to reimburse these products are made up of a portion of outstanding principal and a portion of interest. Consequently, if you want to pay lower monthly payments, it is essential take out a mortgage loan that has a reduced interest.
Currently, according to HelpMyCash, fixed mortgages have an average interest of approximately 1.50%, while variables have it of around Eurbor plus 1%. Thus, the ideal is to look for a credit with a rate below these average values and negotiate with the bank so that, if possible, it will lower it even more.
At a fixed rate, for example, the BBVA Fixed Mortgage It could be a convenient option, as it has an interest from 1% in exchange for direct debit payroll and take out your home and life insurance. And at a variable rate, the Openbank Open Variable Mortgage It is one of the most attractive, since its rate is Eurbor plus 0.95% (1.95% fixed the first year) for direct debiting the income and taking out home insurance.
2. Watch the price of additional products
Now, as you can see in the examples, to get a low interest it is usually necessary to contract other products and services of the bank: insurance and cards, direct debits and receipts, pension plans. If it is not done, the applied rate usually rises between 0.5 and one percentage point, although it is something that depends on the commercial policy of each financial institution.
Several of these products also cost money (insurance, for example), a price that is in addition to the mortgage price. For this reason, it is important calculate how much you will have to pay for these services and check how much interest will rise in case of not hiring them. Thus, the applicant can assess whether it is worth subscribing to them or if it is more cost effective to take out a mortgage loan with a somewhat higher interest that includes fewer additional products.
3. Do not choose a longer term of the account
Finally, it should be borne in mind that the longer the repayment term of a mortgage, the more interest accrues, so the more expensive the loan is. Thus, It is not advisable to unnecessarily lengthen the repayment period, because although this allows to pay more affordable monthly installments, it will also make the client pay more in interest.
However, it is not advisable to set a very short term that triggers the amount of the monthly payments, since that can increase the risk of delinquency. According to HelpMyCash, the ideal is set a repayment period that is as tight as possible and that, at the same time, allow you to pay fees that can be paid with a maximum of 35% of income monthly net of the applicant.
According to the criteria of
The Trust Project Learn more