Mediolanum, BBVA, Kutxabank and Bankoa offer the best market prices, but their conditions are very different.
BBVA has given a new twist to the showcase of variable rate mortgages. The bank has lowered the spread over the Euribor to 0.89%, the lowest in the market along with the “Hipoteca Privilegium Vip” from Banco Mediolanum.
In addition, it has eliminated the opening commissions, has opened the possibility of financing up to 100% of the price of the house under certain conditions and has taken the repayment period up to 40 years. What more can you ask for.
At present, up to four entities already offer differentials lower than 0.99%, which is the most common percentage among operating banks in Spain.
In all cases, these mortgages have fixed initial rates that extend during the first year of life of the loan. This initial band with which the banks are protected from future increases in interest rates and which make the final price of the mortgage more expensive is located within a wide range of 1.25% and 1.89%.
Therefore, these mortgages have very different conditions. They are neither better nor worse, but it is obligatory to read their small print.
The combination of the differential (Euribor + 0.89%) and the fixed rate of 1.40% applied to the first year is unbeatable. But as its name suggests, Privilegium Vip Mortgage is not available to everyone…..
At present, up to four entities already offer differentials lower than 0.99%, which is the most common percentage among entities operating in Spain.
Best conditions from Banco Mediolanum but…
The combination of the differential (Euribor + 0.89%) and the fixed rate of 1.40% applied to the first year is unbeatable. But as its name suggests, Privilegium Vip Mortgage is not available to all budgets.
There is no mortgage with more demanding conditions. To access this product, it is necessary to have assets of at least 350,000€ in Banco Mediolanum, of which 100,000 have to be managed savings products. The other handicap is that it has an opening commission of 1%.
In second place
BBVA The other mortgage with the cheapest differential in the market has eliminated the opening commission and reaches 40 years to pay back. It demands the domiciliation of a payroll of at least 600 euros and contract the housing insurance with the entity.
In addition, BBVA requires the contracting of loan amortization insurance with BBVA Seguros for at least 50% of the amount of the mortgage. The cost of this insurance depends, depending on the entity, on the profile of the client, the age, the amount and the term of the loan.
One of the weak points of the mortgage is the 1.89% that applies to the fixed rate of the first year of the operation. It is the highest among the four mortgages with the lowest spreads.
But the big news is that BBVA can finance up to 100% provided that the price does not exceed the appraised value. Officially, it is the only bank that offers this possibility to its customers, although others also offer customized solutions.
Textually, the BBVA website states that "if you need more money (above 80%), we will try to find a solution that suits your needs."
Kutxabank. Among the cheapest
This bank is among the cheapest, it is the mortgage with the most impositions from the bank. In addition to home and life insurance, it requires the direct debit of a payroll for at least 3,000 euros, an annual card expense of 3,600 euros and a contribution of 2,000 euros a year to pension plans.
In return, the initial fixed rate is very competitive, 1.40% during the first year, as the differential of 0.90% over the Euribor. For its part, the opening fee is 0.25%, with a minimum amount of 150 euros.
Bankoa the most straight forward
If you don’t want to complicate your life, then Bankoa mortgage is for you. With no opening commission and an attractive initial fixed rate of 1.30%, the mortgage is one of the simplest on the market and the one with the highest differential (0.95%) among the four cheapest ones.
This mortgage conditions falls within the average for this type of loans, with the unique imposition that Bankoa requires an annual purchase in shops for an amount of at least 2,000 euros with their credit card. Well no one is perfect!!