understanding difference between fixed rate mortgages or variable is truly important in addressing the Buying a home. If we need bank financing to buy a property, In addition to carefully study the characteristics of the mortgage offer to choose the best option that meets our needs and possibilities, we must assess what interest rate we want to do I set or variable rate?
WHAT IS THE DIFFERENCE BETWEEN MORTGAGE fixed or VARIABLE?
Mortgage fixed rate loans are to pay a fee during the agreed term. This ensures that the fee will not change or be affected by the euríbor. Instead, mortgage variable rate loans vary in each revision share evolves as the benchmark Euribor or agreed.
There are other mortgage mortgage as "armored" which means paying the same rate despite having a variable rate changing deadlines rather than the quota. This type of mortgage is more difficult than a retail customer is offered.
Although today, most mortgages are hired in Spain are variable rate, specifically the 90,3%, It may not be a good idea to end all. Each case is different and why, you need to study in detail the possibilities and carefully choose the one that best suits our needs. Finding a good balance between quality of life and loan repayment.
Among other factors it depends on the economic situation of each, needs and preferences of the applicant, On one side, and the possibilities that really has to get funding.
In each case, the bank will have to analyze the situation of the applicant. If it comes to a family with stable income over time, no additional income to their payroll, with limited savings capacity as will ideally be offered a fixed rate mortgage. But nevertheless, If the bank considers that the applicant does not meet the requirements, it might just offered the possibility of variable rate mortgage.
SO, Or do I set VARIABLE INTEREST?
It is the great dilemma that arises when signing a mortgage. At a time when the Euribor and interest rates have bottomed out and no longer have to wait for another rise, fixed rate option is becoming more attractive. Especially, when considering the 2008 Euribor soared above 5% and greatly complicate payment of dues many families that had borrowed at floating rates.
The problem is to know what will happen. When will raise interest rates? Is it really more advantageous fixed mortgage? What level have to climb the euribor to compensate for a fixed time vs. variable mortgage?
according to experts, "For a fixed rate mortgage is profitable at an average mortgage 20 years, the euríbor must be placed well above the 2% and sustained " (Antonio Gallardo, expert iahorro.com, source: cincodías.elpais.com)
We hope we have clarified the difference between fixed rate mortgages or variable. Important information when buying a home. If you have questions, or comments please contact us in private and try to answer all your questions.