How to get the best fixed mortgage in 2022

In the last year the mortgage market experienced a remarkable growth and everything seems to indicate that, in the coming months, the trend will continue to be upward. One of the main reasons is the good prices of mortgages, especially fixed-rate mortgages.

Major banks are offering mortgage products with very attractive conditions for home buyers.

According to the latest data published by the INE, in October 2021 the number of mortgages constituted on homes was 27.9% higher than during the same period of the previous year. A revealing fact that serves as an example of the boom that the buying and selling market is having in recent months.

Data from the National Institute of Statistics also show that fixed-rate mortgages are the ones that are having the most acceptance among buyers. In October 2021, variable-rate loans accounted for only 35.6% of mortgages. 64.4% were fixed-rate.

Why is the number of fixed-rate mortgages rising?

Mortgage products at a fixed interest every day are more attractive. The offer is wide and this generates competition between banks. Customers benefit from it by getting the conditions of their mortgage loans to be better and better.

The average amount of the interest rate is close to 2.5% but, according to David Crespo, “in the market there are offers of 1.25% for certain customer profiles”. So it is possible to look for a mortgage that fits specific needs saving a lot of money.

For users, the main advantage of hiring a fixed-rate mortgage is that they know that they will pay the same fee throughout the life of the loan. In addition, interest rates are low, especially if repayment terms are shorter.

This is the case of the Openbank Open Fixed Mortgage, for a 30-year home, the APR is 1.57%, at 25 years it is 1.53% and at 20 this is reduced to 1.48%. Another example is that of EVO mortgages. The conditions of the Fixed Rate Subsidies are: 1.60% APR, 1.29% NIR for a term of 20 to 30 years. The non-subsidized Fixed Rate on the other hand are: 1.75% APR, 1.49% NIR and with the same term as the previous one, from 20 to 30 years.

If as a buyer you have a conservative profile and do not want to take risks with variable interest rates, your ideal mortgage will be at a fixed rate.

What to do to get the best fixed mortgage in 2022?

After knowing what kind of products banks are offering, we must make a comparison between them according to our needs. The value of the property, the repayment term and the fact that these products have or do not have links are factors that will influence the percentage of interest you will pay.

If for example we look at the Mari Carmen de Abanca Fixed Mortgage, the interest rate will depend on the option you choose:

  • The interest rate varies according to the repayment term:
    • Up to 15 years: 1.45% NIR (3.43% APR) with bonuses.
    • Up to 20 years: 1.79% NIR (3.69% APR) with bonuses.
    • Up to 25 years: 1.85% NIR (3.68% APR) with bonuses.
    • Up to 30 years: 1.89% NIR (3.66% APR) with bonuses.
  • It offers a maximum financing of 80% on the appraised or sale value, the one with the lowest value.
  • Abanca does not apply an opening fee, total or partial early repayment or novation. It also assumes the appraisal expenses.

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By Catharine Bwana