Which mortgages have the lowest interest rate for the average customer? – CVBJ


Updated Wednesday November 17, 2021 – 12:00

The average price of mortgages is at its lowest, according to data from the Bank of Spain. This means mortgage interest rates are hitting historic lows. But who offers the lowest interest rates for an average client?

The average price of mortgage loans stood at 1.57% APR last September.

Last September, according to the latest data from the Bank of Spain, the average price of mortgage loans amounted to 1.57% APR; the second lowest value ever recorded by this organization. Translated, it means that mortgage interest rates are at historically low levels. That said, many consumers are wondering what the lowest rates average customers can access. According to the banking comparator HelpMyCash.com, BBVA and ABANCA offer the lowest interest rates, but are they really the cheapest?

At a fixed rate, BBVA offers interest from 1%

Analysts at this comparator claim that BBVA Fixed Mortgageit is, within its modality, the one that presents the least interest to the average customer. It’s from 1% for a term of up to 15 years, 1.20% if the money is repaid up to 20 years, 1.30% if it is repaid up to 25 years and 1.45% if the repayment period reaches up to 30 years.

We must qualify, yes, that these interests are subsidized. In other words, you have to contract a series of BBVA products and services to get them. Concretely, it is necessary home payroll of at least 600 euros per month (a pension of 300 euros per month or more or social security if you are self-employed is also valid) and take out the entity’s home and life insurance. If you do not meet any of these conditions, the interest increases by one percentage point.

BBVA finances up to 80% of the sale or appraisal value of a habitual residence (the lowest) or up to 70% of that of a secondary residence; to be returned within a maximum period of 30 years. It does not charge an opening commission, but applies a full or partial early repayment indemnity of 2% (1.50% from the eleventh year).

At variable rate, ABANCA offers a differential of 0.85%

The variable mortgage with a lower interest rate is, according to HelpMyCash, ABANCA’s Mari Carmen Variable Mortgage. Its kind is Euribor increased by 0.85%Although, as is usually the case with these products, a fixed interest of 0.85% is applied in the first year (most banks charge an initial fixed rate above 1.50%).

Like BBVA, ABANCA reduces interest in exchange for satisfying three requirements: home recurring income of at least 600 euros per month (or social security, if you are self-employed) and take out your home and life insurance. If none of these products or services is contracted, the applied rate increases by 0.70 percentage point.

This Galician entity offers to finance up to 80% of the appraised or sale value (whichever is less) of a usual house or up to 60% of that of a second home; with a duration of up to 30 years. It does not charge opening fees or full or partial early repayment.

A lower interest rate is not always cheaper

From HelpMyCash they assure, however, that there are banks that give cheaper mortgages to the average customer even if their interest is higher. And the point is that the price of these loans is not only determined by the rate applied, but also by the commissions that it can include and the cost of the products that must be taken out (insurance, cards, etc.) for get good interest.

The Openbank home loans, for example, they cost less in the long term than those mentioned: they have higher rates (a fixed rate from 1.15% and a variable rate from the Euribor plus 0.95%), but since they are subsidized for the levy, an income of at least 900 euros per month and take out home insurance (without life insurance), have a lower cost.

For this reason, the analysts of this comparator advise request funding from various entities and calculate the total price of their offers to find out which one would pay the most. They also recommend negotiate the conditions with each bank (especially with traditional entities such as BBVA or ABANCA), because it is possible that someone improves them to “steal” a potential customer from the competition.

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