Interest rates continue to fall on the best mortgages. Banks enter into a type of “war” to attract new clients, after learning of the latest decision by the European Central Bank (ECB) to keep rates at the same level for another month from September.
So what is better, a fixed mortgage or a mixed one? Let’s see what offer there is for each one as of March 2024.
Housfy Hipotecas is one of the largest mortgage brokers in the country that, thanks to its agreements with more than 20 banks, negotiates with entities to obtain the best conditions for its clients.
Of all the mortgages processed by Housfy, the best interest rate on a fixed mortgage in March 2024 is 2.35% NIR. It is reduced by at least 0.05% from the previous month, when it was 2.40% NIR.
Banks are fighting for the most solvent financial profiles and are willing to offer them very good conditions to sign with them. See a representative example below.
For those who cannot access such an attractive fixed interest rate, there is an option that is becoming very popular. This is a mixed mortgage, which offers a fixed period that cushions these years of high rates.
The best mixed mortgage processed by Housfy in March 2024 has a first fixed tranche of 5 years at 1.75% NIR, which is 0.60% less than the best fixed mortgage.
The rest of the period of this loan in question is at Euribor 0.65% TIN, assuming that the client meets the conditions and can apply the corresponding bonuses. If the Euribor falls by then, the client will be left with very low rates. If the Euribor remains high, the client has time to anticipate and either repay the mortgage or switch to a more generous fixed rate.
Below, we show an example of what a common mortgage would look like with this interest rate. To calculate another specific case, a mortgage installment simulator can be used.
The ECB recently announced that, in March 2024, it would maintain eurozone interest rates at 4.5%, the same rate since September last year.
With this, the banks have assumed that this was the ceiling of market interest rates, so they have allowed themselves to adjust their offers downwards to attract their clients.
If everything continues as planned, the ECB would begin to apply the first reductions around June 2024 and, from there, it would continue to gradually lower them during 2025.
For this reason, the mixed mortgage is the favorite of specialists: as we have seen, it allows you to have a more competitive fixed interest rate in the first years, but it offers the opportunity to benefit from possible rate drops in the future.
