ING wants to promote mixed-rate mortgages, those that start with a fixed interest to spend in the middle of the life of the mortgage loan at a variable rate.
Proof of this is that in the first trimester, this type of credit represented 36% of the total signed.
Thus, ING’s Mixed Orange Mortgage reduced the initial tranche from 1.45% to 1.25%.
The variable period remains at Euribor plus 0.99%.
Banks are looking for a way to increase their income in the face of falling margins as a result of low interest rates, so they choose to offer their customers products that are more advantageous to them.
In the case of mixed-rate mortgages, the client must know that he will pay more. Not because of the initial fixed rate, but because of the final variable, since right now, the Euribor closed in negative (-0.48%) and banks expect another ten years in negative.
From there, the client who opts for these credits may face a situation in which the rates start to rise when it goes to variable rate, so that they would never benefit from the historically low levels that the index has.
When would it pay off?
The question that the mortgage can ask is when this type of credit could pay off.
On the one hand, there should be situations that today seem impossible. The first one is that the Euribor climbs above 1% in the next two years.
Something, which for the moment, seems totally rulable, since Bankinter analysts calculate that the benchmark index will also close 2022 at around -0.40%.
The second is that once the fixed-rate term has passed, the Euribor has risen and has started down the path of decline again. Also discarded by the bank.
This does not mean that there are no mortgages who are not interested. To begin with, they are those who hope to pay off the credit quickly.
The bank sells these credits as the way for the client to gain peace of mind in the initial period, since they will always pay the same fee.
The bank reopens the mortgage war, which never closed
These types of offers are aimed at attracting customers and opening the mortgage war once again.
In fact, at the beginning of January Openbank made its mixed-rate loans cheaper by offering a mortgage loan with a fixed tranche for the first ten years at 1.35% APR for mortgages between 11 and 15 years; at 1.50% APR from 16 to 20 years; at 1.59% APR from 21 to 25 years and at 1.69% between 26 and 30 years.
As of year eleven, the interest on the loan is for all cases at Euribor + 0.49%, fulfilling bonus conditions.
This price war is spreading across the board. Since the confinement, and as a consequence of the impossibility of signing new loans, subrogation was promoted, especially for clients who got mortgaged in 2013 and onwards.
But the fixed rate also attracts the attention of banks with juicy offers since regular income is guaranteed.
But not only that, the gateway to the best offers is the link, so, in addition to obtaining income via credit, insurance, payroll and the obligation to contract other investment products with significant commissions are included.
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