The rise of euribor In recent years, the policies of the European Central Bank (ECB) aimed at containing spending to curb inflation put homeowners with serious problems. variable rate mortgagewho saw their monthly loan payments skyrocket to levels they were unaware of.
This situation caused The Government will implement the Code of Good Practices in 2023forcing banks to eliminate the charging of commissions to their clients if they change their mortgages from variable rate to fixed or mixed rate to try to alleviate the situation, which is known as mortgage subrogation.
The measure, however, declines on December 31 due to the declines experienced by the mortgage index, Therefore, those who want to benefit must act quickly. In this way, the end of the year is a good opportunity for consumers who want to transform their variable loans into fixed or mixed loans without commissions. From 2025, the commission for this operation will be a maximum of 0.05% on the outstanding amount, so for a mortgage of 200,000 euros, 100 euros had to be paid for this concept.
But given the probable further reduction of interest rates in December, many mortgage holders wonder if it is worth waiting a little more and carry out a mortgage subrogation when rates are even lower.
Richard GarrigaCEO and co-founder of Trioteca, Spain’s leading digital mortgage platform, explains that “with the Euribor still above 2.5%, it is advisable to switch to a fixed mortgage before the end of the year” because ” “Variable mortgages still exceed 3.5% interest, which keeps the financial burden high for many families.” “Not only does it ensure a lower interest ratebut you also avoid paying bank fees,” he says.
According to data from the Trioteca Study Center, currently 80% of the mortgages signed in Spain are at a fixed rate, with an interest rate that is around 2.35% TIN, thus allowing a saving almost 100 euros per month for loans of 200,000 euros regarding variable mortgages.
“Now is the best time”
For Simone Colombellimortgage director of the comparator and mortgage advisor iSavings“anyone who is doubting whether or not to change their variable mortgage should know that now is the best time because it is a process that will be practically free”, since “by subrogation you would only have to pay for the appraisal of the home”, which has a cost of about 400 euros.
“Asking for a subrogation compensates when we have been in the same bank for a few years and we see that interest rates have dropped and, therefore, the conditions of the new mortgages are better than those signed when taking out our mortgage,” advises the iAhorro spokesperson, who adds: “The main incentive when making a surrogacy is savings in the monthly payment that the mortgage holder may incur to make the change”.
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