Euribor: how it will affect your mortgage when it starts to rise
Fixed or variable? This is the big question that citizens face when choosing a mortgage.
The financial crisis of recent years triggered the Euribor to 5.393%, the highest level reached in July 2008. This situation raised the quotas that the mortgaged had to pay to the banks, becoming an unsustainable situation for many families.
The immediate reaction to this situation on the part of the banking entities was the closure of the mortgage tap. They stopped giving these loans or they only occurred when the clients fulfilled strict economic requirements. However, the economic recovery of recent months has reactivated the market although clients, for the time being, are betting on fixed mortgages against the variables.
The trend of "fixed rate" has grown since 2015 when they were 7.4%. In 2016 they grew up to 23.7% and 2017 closed with 38% of this type of loans against the variables, according to data from the National Institute of Statistics (INE).
«80% of the mortgages that we make are at a fixed rate. There is more demand for 'fixed rates' because the client is looking for total certainty and wants to know the final cost of buying their home. Citizens who want fixed-rate mortgages are people who buy a second home or buy the first, but do not have a positive experience with variable rates. However, those who prefer variable rates, this is usually their first experience in the mortgage market, looking for a long-term loan and are usually young people, "said Santiago Cruz del Pozo, CEO of Ibercredit.
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