The mortgage payment becomes difficult to digest for mortgage holders who contracted their loan before April 2022, when the Euribor moved negatively for six consecutive years. After increasing more than four points in just 23 months, with the consequent disbursement of hundreds of euros more per year, many households are considering changing their mortgage. Waiting a little longer can be beneficial, because the period of sales in the mortgage market has just begun.
The turn in the upward trend of the Euribor, which fell below the 4% threshold in December, and the competition between financial entities are the main factors that are pushing, although still timidly, the downward supply of fixed rate loans. The same does not happen in variable and mixed mortgages, which according to data managed by the Association of Financial Users (Asufin) have become more expensive in the last year.
The association’s head of studies, Antonio Luis Gallardo, also warns that the difference is narrowing between the mortgage offer in which the contracting of linked products is required – such as insurance, cards and pension plans – to reduce the interest rate and the mortgage offer without ties. In this sense, it is recommended to look at the APR or equivalent annual rate instead of just the TIN or nominal interest rate. “When you compare the APRs of both, the differences are only three or four tenths,” he warns.
Therefore, “the cost of a subsidized mortgage is so extremely high that there is almost no difference between them, and it must be taken into account that the APR does not include all the expenses that subsidized mortgages entail, such as credit cards, alarms. or the commissions of an investment fund”. To calculate this rate, life, home and amortization insurance are considered.
Gallardo maintains that the bank is not yet transferring the drop in the Euribor of recent months to its offer. The abrupt rise in the price of fixed-rate mortgages – which represent 54% of those established – has caused the mixed mortgage to gain ground. “It is the star product and the one that is marketed the most,” he points out.
According to data from the association, the average exit rate for fixed mortgages with links is 4.11% APR, compared to 4.51% APR without links. In the case of the mixed one, the rate rises between 4.33% -with links- and 4.57% -without any links-. While it is between 4.85% and 5.25% in variable mortgages, which would be the most expensive offer.
Despite the fact that the bank is beginning to make a move, Gallardo maintains that “we are not in the best time of the year to change mortgages.” The association foresees that there will be more substantial reductions in interest rates, as a consequence of the decline in the mortgage business. , as indicated by the latest mortgage creation data from the National Institute of Statistics (INE). However, for those whose payment has increased significantly, waiting a few months may be more expensive than making the change in February or March of this year.
Trioteca points out that the average nominal interest on mortgages signed through this broker, which works with 16 entities in Spain, was below 3% in February, both at a fixed and mixed rate. Lower percentage than that being applied to variable loans referenced to Euribor – which is 3.6% – with a differential of one point.
With the rise in the Euribor, the company highlights that fixed and mixed mortgages are currently chosen by the vast majority of banking users, while remembering that, thanks to the Real Estate Credit Law of March 2019, ” It is possible to change your mortgage whenever you want. This means that, if they opt for a mixed mortgage now, when the fixed period of the loan ends after five years, the user will be able to make the leap to another entity by contracting a new mortgage at a mixed rate if it is more beneficial. “But if it is not negotiated well, the bank can make the change difficult,” warns the CEO of Trioteca, Ricard Garriga. To avoid this, he advises going to a broker.
The client’s income can make the difference when it comes to finding a mortgage at a good price. Thus, those couples who collect 6,000 euros net per month in 12 payments can opt for a reduction in the standard interest rate – up to 2.5% TIN – and no ties are required. “We are seeing that other entities are beginning to lower the requirements for average incomes,” says Garriga. And he adds: “There are even beginning to be mixed mortgages at 1.85% and offers that were never seen in 2023.”
In any case, subrogating or changing the bank mortgage is always a good option if, after analyzing the operation, it is concluded that it will mean savings. In this sense, Laura Martínez, spokesperson for iAhorro, argues that in the last two decades users have paid on average around 3% interest for their mortgages, if we start from the basis that many have mortgages referenced to Euribor with a one point differential. So, “if you can find a fixed mortgage below this percentage, it will be a good mortgage, especially if it is to finance a first home and the repayment period is 30 years, since it will give you stability.” However, ultimately it will depend on the user’s profile and the links – if any – that have been agreed with the entity.
In cases where it is worthwhile to make the jump to another entity, for many users the change can be quite cheap or even free, since this year the elimination of commissions for early repayment of loans at a variable rate continues, the conversion to a fixed rate, as well as the extension of gratuity to conversions from variable to mixed rates. They will only have to cover the cost of the appraisal, which some banks also “give away,” Martínez concludes.
