Latest mortgage rates?

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30 Jun 2012 6:21 PM by leelussier Star rating in Canada. 4 posts Send private message

Buying my first Spanish propert, for better or worse. Can anyone direct me to the latest offerings by banks? I find it very difficult to find a bank which publically offers their rates as in Canada. I am hoping for 3% fixed or 1.5 above Euribor; is this realistic?





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30 Jun 2012 7:05 PM by bobaol Star rating. 2256 posts Send private message

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 Annoying, isn't it?  Unlike other countries who tell you the rate in their adverts, the Spanish banks don't seem to want to advertise theirs.  However, mine is currently 2.5% and is variable so that's about 1.6% over the euribor rate.  





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30 Jun 2012 7:16 PM by leelussier Star rating in Canada. 4 posts Send private message

 

>bobaol: So, my expectations are not unreasonable. Thank you for your timely response.

 

If anyone can provide a mortgage rate reference website, I'm sure it would be very popular.





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01 Jul 2012 6:18 PM by claire T Star rating in Torremendo, Orihuela. 689 posts Send private message

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Hi - I don't think you will ever see a mortgage rate reference website here, as they seem to just make it up as they go along! 

A colllegue was buying a house with a 100% mortgage plus costs (a repossession of course) - then the bank said they were not paying the costs, then they said (after stalling for about a month) that they would only give him 80%.

If they can't even decide what terms they are offering, I don't think you will get them to promise any particular rate.

They can also be very reluctant to lend at all if it is not their own property.  Then they have a maximum loan to value, then a minimum amout they will lend, etc, etc, etc.

We always advise people to go to a mortgage broker, as they tend to know all the banks and can negotiate with them to find you a good rate.  I can give you a name for the Costa Blanca if you are buying in that area.  Just send me a PM.



_______________________
Claire



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03 Jul 2012 8:08 PM by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

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Hi Lee currently there is no such thing as a mortgage rate reference website. Following on from Claires comment they change terms and conditions as frequently as they change their underwear ...... simultaneously not publicising what the changes are.

However to try and give you some insight - generally most lenders follow Annual Euribor on the day of purchase completion (realistically this would be the rate published on the first of the month) plus whatever margin above that the bank charges. What this means is that you effectively have a one year rolling fixed rate. The rate is fixed for 12 months and just prior to the anniversary of completion it is set for another 12 months and so forth for the life of the mortgage.

Fixed rates are generally unpopular with the Spanish. Owing to banking restrictions on arbitrage they are not permitted to hedge the risk. Thus they will consider long term money markets and the overall risk of what rates might do. Then they "stick their finger in the air" to see which way the wind is blowing and will offer a rate between 2 and 3% (in personal experience) above the standard Euribor plus calculation. They are only ever considered by special request and dont have a published portfolio as rarely do people take them.

Many lenders will insist that you take out their life insurance - some of them on a single premium basis (i.e. a policy costing several thousand Euros which will provide life cover for the term of the loan so be careful of this - for many lenders it is a deal breaker despite the fact it is actually illegal to insist you take their in-house life cover - however they are permitted to decline you the mortgage if you dont want their life cover.......you work it out!). There are some that will permit you to cancel the life cover after the first 12 months but this will incur an increase in the margin above Euribor.

Currently the market is running between 1.8% and 3.5% ABOVE 12 month Euribor subject to loan to value, terms etc. Be careful of lenders offering the old method of interest charging - for the life of me I cant remember what it is called (Alzheimers is setting in )  at the moment and most lenders have abandoned it, but it would probably be polite to call it abusive and many years ago I asked a bank that applied it to explain to me how it was calculated to agree to their published rate of (at the time) 4.5% and the physical interest (in money) that was charged on a ten year illustration was closer to 7% p.a.

You can view up to date Euribor settings at   http://www.euribor-rates.eu/ or at the ECB's own page or the Bank of Spains page but the link provided is an easy site to navigate.

Hope that helps.......albeit maybe only a little.



_______________________

Smiley - patrick@marbellamortgages.com  www.marbellamortgages.com   www.comparetravelcash.co.uk




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07 Jul 2012 6:55 AM by leelussier Star rating in Canada. 4 posts Send private message

Smiley: very good info to go on, especially the mortgage insurance; I'll be looking into alternatives.





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