The attraction of fixed-rate mortgages
It seems that the fixed-rate mortgages are regaining the attraction that never should have lost.
The astronomical prices that reach the homes have forced customers to seek the lowest monthly mortgage market share as possible, before they have resorted masse variable rate loans, backed by a price of money that has been over two years at historical lows.
But the era of low rates is drawing to a close Is it the time for caution and then hire mortgages to fixed rate? Experts predict that the Euribor end of the year close to 4% depending on the futures market anticipates.
Banks and boxes agree that the customer should be thinking of accommodating an environment of higher rates and consider the desirability of a mortgage fixed interest or at least, a mixed, with initial fixed interest in the early years, the higher difficulties, and then move to variable.
'The client is installed on the idea that low interest rates are a constant and only seeks to assume the initial charge, "says Ramon Gras, director of products and processes of Banking of Banco Sabadell. Gras acknowledges that the bank began to bet on the market of fixed-rate mortgages earlier this year, when 'it was a good time, although the response was very low. " The same bewilderment shows Balcones Alejandro Garcia, director general of Halifax, for whom the alert message on the impact of rises in mortgage rates to variable interest 'no creek between customers'.
98% of the mortgages made in the month of May was a variable interest, compared with only 2% fixed rate, according to data from the INE.
If accounts are made for a mortgage of 120,000 euros to 30 years to recruit at a floating rate of Euribor plus a point, ie 4.5%, the monthly fee is at present is of 608 euros. Next year, with a rise of the Euribor half a point, the monthly fee can rise to 645 euros, the same amount it now hired if a fixed rate to 5%. The difference is paid from the moment nearly 40 euros a month, but with the reassurance that the monthly fee and is shielded to future increases in interest rates.
More information: http://www.cincodias.com/articulo/D/hipotecas/tipo/fijo/recuperan/atractivo/alza/intereses/cdspor/20060826cdscdicnd_1/Tes/
Written by Carlos Lopez on August 28, 2006 with 2 comments
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