Which is better, online or traditional banking? Where can you get the best mortgage?
Online mortgages offer lower interest rates than traditional mortgages, and many clients prefer them because they're convenient to take out online. Others, however, prefer traditional banks for their many physical branches and numerous cash machines.
But when it comes to taking out a mortgage, which suits us better?
Which is better for a mortgage, online or traditional banking?
Traditional banks are facing serious competition from online banks. Unlike traditional banks, online banks have lower costs and fees, as well as cheaper mortgages.
Even so, thousands of clients still choose to keep their account or mortgage with a traditional bank because of its physical branches. Having a branch where you can go to do things in person is an option for certain groups of clients, especially older people who aren't used to doing things on a computer or mobile phone.
Many traditional banks are investing heavily in their online banking, attracting their regular customers that way to stop them going to the competition.
Some clients still prefer the personal service of a traditional bank with a branch near home, although banks are making it harder and harder by cutting opening hours and customer services.
But this model is becoming obsolete, as the statistics show. Most banks are closing branches en masse and cutting staff to reduce costs and make their products more competitive.
Little by little, the whole banking system, like every sector, is moving to the online model. That way they need fewer staff to serve more customers, as customers do most things themselves through the bank's website or app.
Also, most transactions done online usually carry no fees, while banks are charging fees for practically anything done in a physical branch.
Online banking is cheaper
Most online accounts have no maintenance fees as long as you pay in your salary or meet some other small requirement. A regular fixed income is enough for a fee-free account for life. If you're looking for a bank to keep your account in without paying fees, read our blog Banks that don't charge fees.
Their cards and other products also have no unnecessary charges. It's true that without branches they don't have as many of their own cash machines, so most online banks offer cards that let you withdraw money from many other networks' machines free of charge.
Their mortgages are usually cheaper and have a much lower interest rate, although this always depends on the client's profile. They also generally have fewer tie-ins than a traditional bank's mortgage, usually limited to paying in your salary and taking out life and home insurance.
The conditions for an online mortgage aren't stricter than for a traditional mortgage. And the response time is usually much shorter, as it's assessed online.
Traditional banks can match or beat the offer
Although online banking is cheaper than traditional banking, traditional banks have more room to negotiate with clients. Although every bank starts with set terms, which online banks won't budge on, traditional banks can negotiate the offer until it fits what the client wants within the lender's approval parameters.
While online banks have the same terms for all their customers, traditional banks can adjust their offers to the client's profile and may match or beat an offer if the profile is very good.
Which suits me better?
Just as no two clients are the same, no two mortgages should be either.
Every client needs a mortgage tailored to their needs and circumstances. That's why we recommend getting completely free advice from our mortgage advisor, who will tell you which bank and mortgage suit you best.
You can request your free advice or visit any of our offices, or you can contact 695033558 or the Cruzhumilladero@valoracasa.es
Juan Rosado
CEO
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