Mortgage Rates

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21 Sep 2009 00:00 by Paulw Star rating in Bristol and now and .... 40 posts Send private message

Couple of questions:

1) Can you get interest only mortgages? I have been offered 5 years interest only then reverting to normal repayment

2) What kind of rates are there out there right now - I have been offered Euribor +1.25% from the developers bank and +1.4% from others.

3) What is the typical difference between monthly Euribor and Annual?

Any help would be appreciated as I need to sort a mortgage now for a completion in Nov.



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24 Sep 2009 15:09 by Smiley Star rating in San Pedro de Alcanta.... 2502 posts Send private message

Smiley´s avatar

Longer term interest only mortgages have now all been withdrawn. Maximum is 5 years interest only then reverting to repayment. Overall term will depend on lender.

There is only one lender that offers monthly Euribor - this means the pay rate is adjusted on a monthly basis with changes in the monthly Euribor (similar to a base rate tracker in the UK although not linked to ECB rate but monthly EURIBOR - rate at which prime banks lend to each other). In general this is normally lower than annual Euribor BUT that will be subject to movements in money market rates - dont forget as well that when rates start to increase again the monhly rate will be rising every month where you will be locked into a rolling one year fixed rate - obviously there will be a big jump when the rate is adjusted so smaller monthly increments may be more suitable.

Pay rates in general are determined by whatever other conditions you require as most lenders are different - it is highly likely the developers bank will only offer a maximum 2 years interest only (if any at all). If they are offering one or two years and then tell you to come back and see us and we will renegotiate is usually a load of garbage. Make sure that whatever you opt for is right for you for the term of the loan - remortgage here is first costly (typically 6% of the advance) and second significantly more complicated so not at all like the UK. 


Smiley -

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