2023-05-30 00:07:18
More and more customers are opting for the mixed mortgage when buying their home. Since the European Central Bank decided to “stand up” to inflation by raising interest rates in July 2022, there have been seven increases. The latest increase, applied at the beginning of May, has placed interest rates at 3.75%.
The tightening of monetary policy has had a direct impact on mortgages and it is, in this context, where the mixed mortgage is seen as an increasingly chosen option among home buyers, according to experts from the Hipotecas.com platform.
“This product is beginning to occupy a prominent place within the offer of financial institutions, offering itself as a third way that combines the best of the fixed and variable mortgage“, revealed the Human Connecting Manager at Hipotecas.com, the online channel of the Union of Real Estate Credits (UCI), Noelia Suárez.
In this sense, this typology usually combines an initial period of between five and 15 years with a more adjusted fixed rate than that offered by 100% fixed mortgages, to later refer to the Euribor.
According to the expert, the time to opt for the mixed mortgage could not be more propitious. “Fixed mortgages below 2% have completely disappeared. Now they are around 4% and 5%,” Suárez said. On the other hand, the Euribor rate in April was 3.75%, completing a year of monthly increases.
“This escalation does not attract buyers towards the floating rate either, especially after seeing how this benchmark has been in negative territory for just over six years,” he explained. In this way, he added, “many clients trust that, after the fixed parenthesis offered by the mixed mortgage, the evolution of the Euribor has left behind the current uncertainty and evolves downwards in the long term“.
According to a platform, “it is a product without surprises”
For Noelia Suárez, “the thrust of the mixed mortgage It is on its way to consolidate if the geopolitical situation continues to put pressure on the accounts of European countries“. A look at the data from the National Institute of Statistics serves to realize how “preferences regarding housing financing are not immovable, but rather draw a trajectory according to economic events,” he said.
Thus, the distribution between fixed and variable mortgages favored the latter until in 2021 the roles were reversed. The historically low rates made in 2022 the fixed ones will occupy 70.9% of the new loans compared to 29.1% of the variable ones. The current photo still shows a customer who prefers to pay the same each month. The latest INE statistics, corresponding to April, indicate that 65.7% of home mortgages were established at a fixed rate and 34.3% at a variable rate.
“Fixed ones continue to dominate the market, but they are losing market share,” the expert commented, recommending analyzing the data from the public body prudently, “since they do not include the activity of mixed mortgages.” From Suárez’s point of view, the peak of the Euribor in July 2008, when it reached its maximum value and stood at 5.393%, is still present in the collective imagination: “The aversion to risk that the mortgage customer has developed inclines your decision towards products without surprises, which guarantee you a certain margin of safety and stabilitythat is why the mixed mortgage is gaining followers”, he concludes.
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