Working out mortgage payments

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21 May 2009 00:00 by Emerald Property Management Star rating in Estepona,Malaga. 180 posts Send private message

Can anyone tell me how I work out what my monthly payments will be if I got a 180,000 Euro morgage please? I know it depends on the rates at the bank but how do I actually work out the rough monthly cost?

Thanks for any help



_______________________
Vicci Healy  Emerald Property Management and Building Specialists ...



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22 May 2009 09:51 by sharonw Star rating in Coin, Malaga. 281 posts Send private message

sharonw´s avatar

Hi Vicci,

You do not say over how many years nor if an element of interest Only and of course as you say it depends on rate used but if we were to say e.g. over a 25 year term on Capital and Interest basis at annual Euribor + 1.25 that would give a current mortgage rate of 3.02% and monthly repayments at €863 per month.

Hope that helps!

  



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Regards

Sharon

sharon@tmasspain.com

 www.themortgageservicegroup.com

 




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22 May 2009 12:16 by Rose FP Star rating in Costa Almeria. 20 posts Send private message

Hola Vikki.

The most cost effective route in is, of course, via an 'Interest Only' period. Subject to the percentage you are borrowing (Loan To Value - LTV) that initial period can be from 2 years (70% LTV) to 5 years (60%). There are also lenders still that will consider an 'Interest Only' for the whole term!

So, using your €180k example, the 'Interest Only' payment would be €450 versus the 'Capital and Interest' alternative as advised by Sharon of nearly twice that sum.

IO is good way to ease yourself into the commitment of a mortgage and, potentially for the longer term, it can help to mitigate certain tax exposures and 'risks' that Spanish property has that do not apply in the other countries, the UK being the obvious example.

 



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Mark Mountney Rose Financial Planning



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22 May 2009 21:32 by Emerald Property Management Star rating in Estepona,Malaga. 180 posts Send private message

Thanks guys.

So I am right in thinking that if I paid interest only for 2 years,my payments would then go up to around the 800 per month mark at the end of that period?

Now seems a really good time to buy to me with the econemy being how it is so I am trying to work out if this would be possible for us.

Thank you for your help.

 



_______________________
Vicci Healy  Emerald Property Management and Building Specialists ...



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23 May 2009 09:35 by sharonw Star rating in Coin, Malaga. 281 posts Send private message

sharonw´s avatar

Hi Vicci,

Using my example as previously, if you were to have a 2 year element of Interest Only then the Capital & Interest repayments would be circa €900 euros for the remaining term.  At 70% a max of 5 years on Interest Only is available and if taken then the remaining term would be circa €1,000 euros.   This is only an indication and it is important to note that most lenders apply a higher margin for Interest Only.    There is a lender offering annual Euribor + 0.90 with 2 years Interest Only but the max level is 50%.

 

   



_______________________

Regards

Sharon

sharon@tmasspain.com

 www.themortgageservicegroup.com

 




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23 May 2009 11:40 by Rose FP Star rating in Costa Almeria. 20 posts Send private message

Yep, Sharon's numbers are spot on!

The only exception to the general rule with lenders here with a mix of 'Interest Only' (short period 2 - 5 years) followed by 'Capital & Interest (longer period - to age 80 or 40 years) is for one lender alone that still lends IO for the whole term - max 30 years.



_______________________
Mark Mountney Rose Financial Planning



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23 May 2009 11:40 by Rose FP Star rating in Costa Almeria. 20 posts Send private message

Yep, Sharon's numbers are spot on!

The only exception to the general rule with lenders here with a mix of 'Interest Only' (short period 2 - 5 years) followed by 'Capital & Interest (longer period - to age 80 or 40 years) is for one lender alone that still lends IO for the whole term - max 30 years.



_______________________
Mark Mountney Rose Financial Planning



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27 May 2009 15:10 by Emerald Property Management Star rating in Estepona,Malaga. 180 posts Send private message

thanks guys

Sorry,been offline for a while. Ty for the PM's will be in touch when I catch up with all my paperwork!

Thanks again

 



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Vicci Healy  Emerald Property Management and Building Specialists ...



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