Faced with the fluctuations of the Euribor, which has reached maximums in the first months of the year that have not been seen since 2008, banks have begun to reduce the spreads on their variable mortgages to create interest and sell their products. So those who want -or need- to buy a home in this context can find offers; that improve in the case of young people or high payrolls.
Specifically, there are three products of this model that offer a differential below 0.50%. In fact, Caja Sur promotes two of them. Firstly, the entity has a variable rate mortgage exclusively for young people -under 35 years of age-, and secondly, it offers a general variable mortgage. In both cases the differential stands at 0.49%. Where the two products differ is in the initial fixed rate, which, although in both cases it lasts for one year, in the Youth Mortgage it is 0.10% below. The second entity that seeks to expand its portfolio with a variable interest rate equal to the previous ones, of 0.49%, is Kutxabank. In addition, the initial fixed rate is also maintained for 12 months.
Above these offers are some products with a similar variable interest. For example, Unicaja promotes its variable mortgage with a differential of 0.50%. However, this variable interest does not apply to all clients, since the Malaga-based bank markets it for those who have a salary of more than 2,500 euros per month. For those who are below said threshold, the rate rises to 0.65%. Regarding the initial fixed rate, the bank began the month of March advertising its product with an interest rate of 0.99% during the first 12 months, however, Unicaja chose to raise the cost to 1.25%.
On the other hand, the entity also has an exclusive product for young people -under 35 years of age-, however, in this case, the differential stands at 0.60%. The client must also take into consideration that these mortgage products may imply more expenses. For example, Unicaja has added an opening commission of 0.15%.
The bank has other variable-rate mortgages with differentials above 0.70%, however, given the rise in the Euribor, the initial fixed interest tends to fall. On the other hand, another aspect that the user must consider is that these products have an annual interest review -although some entities will carry out the update every six months, it is not usual-, so they must study their ability to assume a foreseeable quota increase.
If the interested party seeks to avoid this risk, they should consider opting for another type of product that, although they generally imply higher interests. In these cases, the user can opt for a fixed-rate mortgage, which does not vary after contracting it, or, if he prefers, a mixed-rate one, in which case he can take advantage of the initial fixed interest for a longer period of time.
In any case, the possibility of changing a credit and promoting a subrogation or novation within a few years can also be evaluated; to try to reduce the interest cost.