EBN has today become the first bank to offer a reverse mortgage in Spain, a financial product that allows homeowners over the age of 65 to obtain a loan that they do not have to return until the duration of the same expires and that the house is guaranteed. When contracted, it does not imply losing ownership or use of the property, unlike what happens, for example, with bare ownership.
Among the conditions offered by EBN, the entity highlights that the interest on this mortgage is a fixed rate of 6% annual for a maximum value, depending on age and number of owners, of up to 43% of the appraised value of the home. The loan has a variable duration depending on the age of the contracting party and can be canceled at any time, which gives the possibility of selling the home.
Doing a hypothetical exercise. If you have a home valued at 300,000 euros and you take out a reverse mortgage, obtaining a loan equivalent to 43% of the value of the property, EBN would give a loan of about 129,000 euros. If you have to pay interest of 6% per year and the loan lasts 17 years, it implies that approximately 260,000 euros would have to be returned at the end of the loan.
The entity has gone ahead with the launch of the product to Banco Santander. The company chaired by Ana Botín announced last October that would launch a reverse mortgage “soon”, but without giving dates. Company sources assured for a previous article in Five days that “it is very important that it is a product that customers understand 100%” and that they expect high demand.
In the aforementioned article, it was explained that the reverse mortgage is a loan for people over 65 (or severely dependent) owners of their main residence and who want to get extra money in your retirement. “It works contrary to a traditional credit, since it is the bank that pays the owner of the house, as long as it does not have charges, while maintaining the property and the residence. You can choose between a single payment, a lifetime monthly income Or a combination of both. After death, the heirs decide whether to return the loan or give up the property. Most choose to sell the home to pay off the accumulated debt, since the interest generally makes it high, “he detailed already then.
The difference between a normal and a reverse mortgage is, in short, that the reverse does not have to be returned either until the agreed term expires, or until the heirs assume the inheritance and, with it, the debt.
As a simulation, EBN Banco has introduced on its website a calculator It gives you an idea of the conditions. The product is not intended for all owners. “Not all properties are eligible for a reverse mortgage, since they will have to be valued and approved by EBN Banco,” the statement said.
