Mixed mortgages paid off when Euribor fell: the best options

The Spanish mortgage market ended 2023 with a clear leader – mixed mortgages. This loan reappeared after many years of oblivion, after constant rise in interest rates carried out by the ECB to mitigate inflation and rising costs of mortgage loans. Euribor has reached maximum in November above 4%.

However, since December, Euribor has been on a downward trend with several consecutive declines to 3.656%, causing disruptions in the market. lower interest rates on fixed-rate mortgages and positive expectations for variables. However, blended mortgages are holding their own, keeping fixed rates at interesting levels for those who sign up for them and who will subsequently benefit from a possible future fall in Euribor.

A mixed mortgage consists of split the loan into two tranchesthe first, in which the payment fee is calculated according to the formula fixed rate

and the second, in which variable type. As with a fixed mortgage, during the first years of the loan the customer will not have to deal with uncertainty that your monthly payment is subject to changes in Euribor, but the rates applied to this type of loan are usually lower than those with regular fixed interest rates. However, taking out a mixed mortgage does not guarantee that the terms will be favorable when, at the end of the first tranche, interest is calculated as the sum of the agreed differential and the Euribor rate.

The best offers on the market

best options for February 2024, clients, according to Kelisto experts, will be Mixed Mortgage Cajamarawith a five-year fixed rate (2.40% TIN) and variable Euribor+0.6%; That Mixed mortgage Ibercajawith a five-year fixed rate (2.40% TIN) in combination with a variable one of Euribor+0.85% for other years; and finally ABANCA Mixed mortgagealso with a five-year fixed rate (2.5% TIN) and variable Euribor+0.6%.

However, HelpMyCash has created a list restrictions that the client must take into account choose one type of mortgage loan or another. In the case of mixed mortgages, they will not be attractive if the fixed interest rate exceeds 3% and if the difference exceeds Euribor+0.75%. Therefore, they recommend two of the three options above.

Alternative to Bankinter

Bankinter Internet bank offers alternative to mixed mortgage unique on the market, Double mortgage. Kelisto experts say this loan is considered a hybrid loan because it also combines a fixed and variable interest rate on one mortgage, albeit in a different configuration than the others. Instead of dividing the loan term into a fixed and variable portion, a double mortgage divide the total loan amount into these two tranches. That is, the client will pay a certain amount of the capital financed by the mortgage at a fixed rate and another at a variable rate.

This mortgage makes it possible adjust what percentage A portion of the amount is financed with each interest rate so the customer can choose at signing. Two types will coexist during the term of the mortgage and the customer will be charged one-time feebut you will be able to access a breakdown that tells you how much you had to pay for each section.

When applying for a mortgage, the client will also be able to choose how much of the debt will be repaid if the mortgage is issued. early repayment at some point during the 30-year maximum repayment term offered by the bank. So, you can choose whether to amortize the portion of the amount that is subject to a fixed rate or a variable rate, depending on what you’re more interested in.