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Cheap Mortgages Are Not For “Mileuristas”

17/01/2014 – Cinco Dias

Currently the cheapest mortgages offered by banks with less than 2% Euribor, are not intended for the so-called “mileuristas” (people earning over €1.000/month – translator´s note) pockets, as the financial institutions demand around €2.000 monthly payments. (…)

The new Santander´s mortgage for 1.99% + Euribor may be granted only to the clients who meet the requirements stated by the bank: among others, delivering a salary or pension of at least €2.500 each  month. Otherwise, the differential rate will go up to 2.99%.

Similarly, Bankinter launched a 1.95% + Euribor offer that is great indeed, but only for those who can provide €3.000 monthly. Moreover, the interest rate is 3.90% during the first year if an additional payment insurance purchased. In the contrary case, the rate is 4.20%.

The cheapest mortgage, presently proposed by Cajasur (Euribor + 1.25%), is not flawless either. First year is charged with 2.50% interest rate and allows to obtain maximum bonus of 0.50% . A half of it, 0.25%, is taken off from deposited salary and the rest from over €5.000 annual credit card use. Without any back-up, the rate rises to 1.75%.

Although other banks offer higher rates, they also permit lower income. For example, Openbank offers Euribor+2.50% mortgages but the salary deposit limit is €900.

When it comes to ING Direct and its “Hipoteca Naranja” (“Orange Mortgage”), salary deposit is not necessary. Instead, one shall open an account in the bank and maintain it active with monthly income of at least €1.000. In this case the clients will obtain a 2.29% rate. Non-clients will have to pay 2.69%.

Plenty of Linkage

(…) Ties with an entity can reduce the differential by 0.65 percentage points. Apart from the salaries, the products bringing the biggest discounts are: life and house insurances (on average 0.16% less), credit cards (-0.13%), pension schemes (-0.12%) and the mortgage payment protection (-0.11%). (…)

One of the most bound mortgages, the “Hipoteca La Rioja Joven” commercialized by Kutxa, with differential lower than 1% (0.95% exactly) for people under 40, requires purchase of nine linked products, including a car insurance.

However, the Bank of Spain reminds, that clients are not obliged to buy any additional products whatsoever and (…) they are ought to be clearly informed about that before the mortgage signing.

 

Original article: Cinco Días (Miriam Calavia)

Translation: AURA REE