The mortgage war has begun and banks are beginning to offer more competitive interest rates on their mortgages, especially at fixed and mixed rates. But what are the cheapest mortgages in March 2024?
The cheapest mortgages in the short or medium term are mixed ones. According to the experts at HelpMyCash.com, a mortgage broker can get 2.50% interest (3% APR) for ten years, without linked products. After this period, the interest becomes Euribor plus 0.55%, therefore, those who contract it must be prepared for a possible increase in the installment from the eleventh year in case the Euribor is high.
Another option is to take advantage of the savings to amortize the mortgage when the fixed tranche ends, or take advantage of the fact that these products have fairly low novation or subrogation commissions (up to 0.25%) during the variable period. In a hypothetical case of an increase in installments, the conditions could be changed with the same bank or with another entity to make them cheaper, as long as more attractive interests are offered.
The cheapest fixed mortgage can currently also be obtained by a mortgage broker and has an interest rate of 2.75% (2.96% APR) for 25 or 30 years and does not require the contracting of any linked product. Although the interest rate is slightly higher than that of the best mixed mortgage, this type of loan ensures a stable and unchanged payment, regardless of fluctuations in the Euribor. Therefore, they are one of the favorite options of those who prioritize financial stability and do not want changes in their installments.
It is worth mentioning that fixed mortgages have higher commissions when changing banks or renegotiating the conditions with the same entity. According to the bank, the commission can reach up to 2% if the operation is carried out during the first 10 years of the contract, or up to 1.5% if it is carried out in subsequent years.
The best variable mortgage, on the other hand, offers an interest rate of Euribor plus 0.49% (2.33% TIN during the first twelve months) for 25 or 30 years and does not require the contracting of any additional product. In high Euribor scenarios, like now, the interest on this type of mortgage can be higher than that of fixed or mixed mortgages during the first years, but it would become cheaper if the Euribor tends to fall. However, those who decide to contract it must be prepared for fluctuations in the Euribor and, above all, ensure that they will be able to pay the fee even with a Euribor higher than 5%, which is its historical maximum.
The novation and subrogation commissions in this case are also low (up to 0.25%), therefore, changing banks or renegotiating the mortgage is less expensive if you take out a variable mortgage, compared to a fixed one.
The best option between fixed, variable and mixed mortgages depends on the profile of the person taking out the mortgage, but the most important factor to take into account is risk aversion:
A fixed mortgage is the safest option, since it involves paying the same fee throughout the life of the mortgage. A variable mortgage, on the other hand, is riskier, since the payment will depend on fluctuations in the Euribor, which can rise and fall several times throughout the life of the mortgage.
A mixed mortgage is somewhere in between, with an initial fixed period where the risk is low and a final variable period where the risk is moderate. During this last period, the installments may increase if the Euribor rises, but to a lesser extent than with a variable mortgage. This is because if the fixed tranche is at least ten years, most of the interest will have been paid.
