2023-10-29 15:37:40
In a market saturated with options, buyers are often overwhelmed without a clear understanding of the benefits and drawbacks offered by different types of mortgage loans. For this reason, the team of proptech experts Casavo shares the most important points that must be taken into account to know the pros and cons of each type of mortgage and choose the one that best suits the needs of each buyer.
Fixed rate vs. variable type
The debate between fixed rate and variable rate mortgages has gained relevance in recent years. The fixed rate mortgagescon unchanged interest rates throughout the life of the loan, they offer clients greater financial stability and security. However, it is important to consider that it is usually higher interest rateswhich in recent months have had a considerable increase compared to the fixed rates that could be obtained a few years ago.
On the other hand, the variable rate mortgagesas the name suggests, they are not stable and they are subject to fluctuations of the market, presenting a generally longer amortization period. Being linked to reference indices such as the Euribor, the monthly fees may vary according to changes in the financial market, so it is usually a better option if the client foresees a growth in their income in the short or medium term, or has savings capacity, being able to repay the mortgage early in case rates do not be favorable.
Mixed mortgages: stability and flexibility
Las mixed mortgages have emerged as an attractive solution in the financial market, skillfully combining the benefits of fixed and variable rate mortgages. These mortgages offer borrowers a initial period with fixed interest rates, providing an anchor of stability and predictability in the early years of the loan. As the mortgage progresses, a transition to variable interestthus allowing you to take advantage of the advantages of the constantly changing market and adapt to changing economic conditions.
The main attraction of the mixed mortgages lies in its ability to provide short-term financial securitywhile taking advantage of the opportunities potential long-term savings. By planning payments during the fixed interest period, borrowers can manage their finances more confidently, avoiding unwanted surprises in monthly payments. The flexibility provided by the subsequent variable interest rate allows adjustments in the payment according to market trends, which can facilitate future savings and make early repayment of the mortgage possible.
However, it is crucial to examine the specific terms and conditions of each mixed mortgage, as transition provisions and clauses may differ between each client. Thoroughly understanding the possible evolution of interest rates is essential to accurately assess financial sustainability over the life of the loan. With a complete analysis of the risks and benefits, supported by professional financial advice, the mixed mortgages They can represent a balanced and attractive option for those seeking stability and adaptability in their long-term financial strategy.
Trends in the Spanish mortgage market
The internal data of Casavo Mortgages reveal that around 30% of the mortgages marketed by the company correspond to fixed interest rates, while practically the entire 70% The remainder corresponds to mixed-type mortgages, which reflects the current preference of clients for the flexibility that the latter offer.
This upward trend in mixed mortgages It is attributed to the increase in fixed rates and the instability of variable rates, which has led clients to seek initial security and long-term adaptability. However, choosing the best mortgage depends on the profile and financial expectations of each client. While the fixed mortgages offer certainty, mixed They have gained popularity due to their lower initial fixed rate followed by a variable tranche referenced to the Euribor.
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