The ‘bargain’ of fixed mortgages at 1% is over. The Euribor is trading higher again (-0.335% in February compared to -0.477% in January), spurred on by the possibility that the European Central Bank will raise interest rates to contain inflation in the eurozone. Faced with this new scenario, banks have made a 180-degree turn in their commercial strategy, focused on promoting the contracting of fixed mortgages, and now they are looking for customers to mortgage at a variable rate.
With this objective in mind, since mid-February a good number of entities have begun to lower their variable loans and raise their fixed rates. Despite the change in trend, as explained by the financial comparator of HelpMyCashyou can still find fixed mortgages with attractive conditions.
Now, they also clarify that they are offers that must be taken advantage of because, if the forecasts are fulfilled, it is most likely that they will no longer be available within a few months.
Fixed rates on the rise due to the rise in the Euribor
The progressive increase in mortgages Fixed mortgages have a reason for being: anticipating that the Euribor will continue to rise, banks hope to obtain more profits with variable mortgages than with fixed ones, whose interest depends on this reference index.
In other words: if the Euribor rises, people who have contracted a variable interest rate will pay more expensive fees and banks will earn more money. The tactic they use to attract as many clients as possible to the variable rate is to worsen their fixed rate offer.
At the moment, there are already four banks that have made their fixed-rate mortgages more expensive: BBVA (from 1.45% to 1.50% over 30 years), Bankinter (from 1.45% to 1.60% over 30 years), ING (from 1.40% to 1.75% over 25 years) and COINC (from 1.40% to 1.50% at 30 years). And a fifth, Ibercaja, has stopped marketing the One Step Mortgage (1.30% over 20 years), which was one of the cheapest fixed-interest loans on the market.
Some of these entities have also lowered their variable mortgages to make them more attractive in the eyes of their clients. For example, BBVA has lowered the initial interest on its loan from 1.99% to 0.99%. Variable Mortgage (interest from the second year remains at the Euribor plus 0.99%); Bankinter has reduced the interest rate on its Variable Mortgage from Euribor plus 0.99% to Euribor plus 0.85%, and COINC has reduced the interest rate on its Variable Mortgage from Euribor plus 0.89% to Euribor plus 0.80%.
You have to anticipate future increases
According to HelpMyCash experts, it is very likely that the Euribor will continue to rise and that more banks will decide to raise their fixed rates. For this reason, if a client considers contracting a fixed mortgage, it is best to request it as soon as possible. In this way, he will have more options to obtain it with an interest similar to that offered by the bank in 2021.
In these cases, the ideal is to go to a bank that has not yet made its fixed mortgages more expensive. One of them is Openbank, which currently has the best fixed-rate offer on the market. Your Fixed Open Mortgage has a 1.35% interest for a term of up to 30 years, which can be obtained in exchange for direct depositing the payroll and contracting the entity’s home insurance. In addition, this rate can be lowered by 0.10 percentage points if the client requests between 150,000 and 400,000 euros to finance the purchase of their future home.
Another entity that keeps its fixed interests very low is EVO Banco. Your Smart Fixed Rate Mortgage has an interest rate of only 1.24% for a term of up to 30 years. Now, it is somewhat more expensive than the Openbank loan, because, to get that price, it is necessary to take out two insurance policies from the entity (home and life), in addition to direct debiting the payroll.
Mortgage market volatility
Given the current volatility of the mortgage market, there is the possibility that banks change their rate policy during the client’s application process and end up offering a higher interest rate than what they had initially proposed. It is advisable to request financing from as many banks as possible to find those that apply the lowest rates. The person may use these offers to dissuade the entity with which he negotiates if he tries to raise the interest during the contract.