Banks are facing the end of the year in the midst of a mortgage war. After months of activity stagnation caused by the coronavirus crisis, the financial sector is back in action in the fall with very competitive offers.
In the case of fixed rate loans, which have set a contraction record in recent months, we find up to five alternatives that allow financing up to 80% of the purchase price of the habitual residence, without commission opening and with a repayment period of 30 years. All have an interest rate below the historical average of Euribor, although with conditions. We review the main characteristics of each of them using the idealist/mortgage comparator:
BBVA 30 year fixed mortgage
The fixed rate loan for the purchase of a principal residence with the BBVA is subject to an interest rate of 1.45% (2.32% APR). It is the lowest in the ranking, although it includes these discounts: direct deposit of your salary, purchase of home insurance with the entity and also life insurance. For a mortgage loan of 150,000 euros and a repayment period of 30 years, these conditions translate into a monthly payment of approximately 514 euros.
If the customer is not interested in the direct payment of his salary to the bank account and the subscription of the insurance, the interest rate increases to 2.45% (2.93% APR), i.e. a higher rate to those currently offered by Evo and Openbank without discount.
Like the other offers, this mortgage does not include an opening commission, but the client must assume a penalty in the event of early repayment, whether partial or total. The commission to be paid in this case is that fixed by the law on mortgages which came into force in June 2019: 2% for the first 10 years and 1.5% thereafter.
Evo 30 Year Fixed Mortgage
Evo’s best offer, fixed rate and with a term of 30 years, is subject to an interest rate of 1.55% (1.91% APR), which translates into a payment of approximately 521 euros for an amount of 150,000 euros. Although this amount is a little higher than that of the BBVA, the great advantage in this case is that the client does not need to have his salary paid directly into the bank account or to take out insurance. In other words, the interest remains intact even without a bonus.
In addition, it does not provide for opening fees or early cancellation, partial or total, and provides the possibility of having two free insurance policies for the first holder of the loan. However, its main drawback is that Evo adopts a restrictive risk policy when it comes to acquiring new customers.
30-year fixed mortgage from Openbank
Openbank, Santander’s digital bank, enters the list of the most competitive 30-year fixed mortgages of the moment with a loan subject to an interest rate of 1.75% (1.94% APR), which means that you have to pay around 536 euros per month for a mortgage of 150,000 euros.
However, to obtain these conditions, the customer must have his salary paid directly into the bank account and take out home insurance with the bank. And in the absence of these subsidies, the interest rate payable is 2.15% (or 2.16% APR).
One of the advantages of this loan is that it does not provide for an opening commission or partial reimbursement, although it penalizes the total cancellation of the loan: the customer must pay 2% if it occurs during the 10 first years or 1.5% thereafter. In addition, and although after the entry into force of the mortgage law the customer must assume the cost of the valuation of the property and the copies of the deed he requests, Openbank undertakes to pay the cost of the valuation of the property that is the subject of the financing operation.
Liberbank 30-year fixed mortgage
Like Openbank, Liberbank’s most competitive 30-year fixed loan has an interest rate of 1.75% (although in its case the APR is 2.18%), provided the customer pays their salary to the bank and take out home insurance. Under these conditions, the monthly payment for a loan of 150,000 euros would be around 536 euros.
On the other hand, without subsidy, the loan becomes more expensive than that of its competitor, since it reaches 3.2% (3.63% APR), and becomes the highest interest rate in the ranking.
Like other 30-year fixed mortgages, it exempts the customer from paying arrangement fees, although it penalizes prepayment, in part or in full. As for the BBVA, the commission is that fixed by the regulations (2% during the first 10 years of the life of the loan, and 1.5% thereafter). Another of its disadvantages is that it requires the mortgage creditor to have a monthly income of more than 3,000 euros.
Bankia 30-year fixed mortgage
Bankia is the fifth largest bank in the ranking of the best current 30-year fixed mortgages, although with a higher interest rate. Concretely, the interest rate is 1.85% (2.16% APR), which corresponds to a monthly payment of 543 euros for a loan of 150,000
Source: Idealista