Five tips to reduce your mortgage

The reduction of the price of money is creating more and better opportunities for a mortgage is to be signed today, or if we want to improve the existing conditions of an existing one. In this regard, banks are launching new offers with lower interests, meaning reductions in monthly instalments. But there are other ways to pay less for a home loan: a closer relationship with the bank and to opt for loans for properties sold by banks can add extra advantages to tip the balance your way. Here are some of the tips which may help you to lower mortgage costs.


How to trim down the mortgage rate?

The revival of the housing market is a proven fact, because the number of loans has grown steadily in recent months. According to data provided by the National Institute of Statistics, the number of mortgages taken out in May was 19,732 a 10.90% more than in the same month of 2014. This turnaround is due to cheaper loans of course, following the European Bank's decision to lower the price of money; but also is a reflection of the improvement in the main parameters of the economy.

The cyclical change in the brick industry should be exploited to get a cheaper mortgage and a better deal with your bank. Having several options also help to achieve a reduction on the existing costs, good money that can be spent on other needs. There are several strategies to achieve this: from hunting down the latest deals, to opt for additional benefit generated by your own bank.

1. Lowering the mortgage rates by taking advantage of the situation.

This summer, the European interest rate has marked a record low, to stand at 0.163%, which leads to the cheapest mortgages so far. In fact, those who have formalized mortgages last year have made a saving of around 200 Euros in their accounts. It cannot be ignored that the Euribor is the main reference variable rate used by banks in Spain or that about 93% of the contracts are linked to this index.

However, this strategy may be affected if at any time this downward trend stops. Under normal market conditions, this possibility would occur with a possible change in European monetary policy and rising interest rates. According to the experts, it will take a few years for that turnaround. In any event, is not contemplated in the short term.

 2. Differential below the 1.50%

The devaluation of loans is leading banks launching aggressive offers, therefore been easier to detect mortgages with lower spreads on Euribor, even below 1.50%. In any case, it represents an opportunity to reduce this expense.

The ING Direct Orange Mortgage offers mortgages from Euribor + 1.29%, free of commissions and ground clause, and, with no higher rate of interest on the first year.

BBVA has developed a spread of 1.25% without the usual extra costs. Meanwhile, Bankinter has preferred to offer 1.50%, without extra charges.

3. Mortgages on their own property stocks

This is one of the alternatives where the reduction on the mortgage may be decisive, but the selection their housing estate portals. These mortgages, in any case, substantially reduce their spreads.

Spain-Caja Duero imports this model through the Mortgage Net. During the first year is 1.50%, and the remaining 1.70%. Without opening fees, funds the total purchase price.

Banco Popular Mortgage includes Aliseda, with 0.90% and 1.25% for the first and subsequent years, respectively. Contemplates a longer repayment term of up to 40 years with a single commission, compensation for withdrawal (between 0.25% and 0.50%), which allows the total financing of the operation.

4. Subsidised Mortgages.

There are many banks that have decided to lower the price of their mortgages, though not in all cases disinterestedly. Very often they impose a series of requirements such as a greater loyalty to the bank, hiring other products (insurance, pension plans, accounts, etc.). Another strategy used is that the price of the mortgage is lower and in turn the mortgagee salary has to be domiciled through the bank, and thus getting discounts of a few points below its initial percentage.

5. Obtain a mortgage without commissions.

It is the simplest way to save a few Euros every year. Mortgages must be free of any penalty: study, opening, cancellation, totals or partial withdrawal, subrogation ... The reduction that can be achieved is up 3% on the amount claimed. Today, many credits are distributed under this much appreciated feature by users.

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As it is impossible to know in detail every case asked in this blog, all our replies are given in good faith but we strongly suggest that you obtain private advice from a solicitor /and /or  architect who will be able to study in depth your own particular case.

Al ser imposible conocer en profundidad cada caso, todos los consejos y contestaciones a la preguntas realizadas en este blog, los consejos dados son propiciado en términos generales por lo que se deberá contrastar con el asesoramiento privado de un abogado  y/o un arquitecto para estudiar en profundidad su caso.