No seizures or arrears.<\/strong><\/li>\n<\/ul>\nMixed-rate mortgage terms<\/h2>\n
We guarantee you the best terms for your mixed-rate mortgage, tailored to your circumstances and needs. The terms depend on the client's profile and the bank granting the mortgage.<\/p>\n
The more savings the client can put towards the home and the less they borrow, the better the terms they can get, as the bank's risk in case of default is lower.<\/p>\n
You can also get better terms when buying a first home than a second home or investment. And the higher your income, the better the terms. Showing the bank good solvency is essential for negotiating preferential terms.<\/p>\n
Civil servants can also get preferential terms, as banks value them highly as clients.<\/p>\n
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What is a mixed-rate mortgage?<\/h2>\n
Mixed-rate mortgages in M\u00e1laga. What are they? How do they work? Pros and cons of a mixed-rate mortgage. Which banks offer them? Which is best? How do you apply for one?<\/p>\n
The mixed-rate mortgage is little known among consumers, although more and more banks offer this type of product.<\/p>\n
If you ask a group of people what kind of mortgage they want, most will choose a fixed rate.<\/p>\n
But not every bank offers a fixed rate and not every client can get one, so a mixed-rate mortgage is a very good alternative for clients who need a mortgage with a stable repayment.<\/p>\n
A mixed-rate mortgage combines a fixed interest rate for one stage of the mortgage with a variable rate for the rest.<\/p>\n
The fixed rate normally applies for the first years of the mortgage, generally the first ten, and the variable rate for the rest of the term, although it depends on the bank you take the mortgage out with<\/p>\n
In practice, these mortgages work like a variable-rate mortgage with some special conditions.<\/p>\n
A mixed-rate mortgage\u00a0has a fixed rate for the first years and a variable rate for the rest of the term<\/strong>. So repayments are always the same in those first years, while afterwards they can change depending on movements in Euribor.<\/p>\nIn general, the fixed-rate period of mixed-rate mortgages lasts between three and 10 years. Their other terms are similar to fixed and variable-rate mortgages: they can finance up to 80% of the purchase, have a term of up to 30 years and may include fees and linked products.<\/p>\n
Mixed-rate mortgages are attractive if Euribor keeps falling or stabilises at low levels for a long period (as happened in recent years until early 2022). The main problem with these products is that\u00a0it's impossible to predict how Euribor will behave 10 or more years from now<\/strong>, when the variable part of the loan begins. In other words, they're not an option for those who prefer stable repayments without future surprises.<\/p>\n![\"mixed-rate](\"https:\/\/valoracasa.es\/wp-content\/uploads\/2023\/08\/trabajar-EN-MALAGA-RRSS-LINK-HIPOTECA-MIXTA.jpg\" "\\"MIXED-RATE-MORTGAGE-MALAGA\\"")
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Pros and cons of a mixed-rate mortgage:<\/h2>\n
Like all mortgages, the mixed-rate mortgage has its pros and cons compared with others.<\/p>\n
Advantages:<\/h3>\n\n- Interest rate:<\/strong>\u00a0mixed-rate mortgages generally have a lower interest rate than fixed-rate mortgages. For example, ING's fixed-rate mortgage is currently 1.60%, while its mixed-rate mortgage is 1.20% in the first stage.<\/li>\n
- Peace of mind<\/strong>\u00a0in the first years: everyone wants as stable a mortgage as possible to avoid Euribor rises. Having a fixed repayment for the first years of the mortgage will help you plan better and feel more secure<\/li>\n
- Duration:<\/strong>\u00a0as a general rule, fixed-rate mortgages have shorter terms than mixed-rate ones. This way you can extend the mortgage term to reduce the monthly repayment<\/li>\n<\/ol>\n
Disadvantages:<\/h3>\n\n- Interest rate<\/strong>: Euribor is currently at historic lows and has been for several years. With Euribor so low right now, a mixed-rate mortgage isn't very attractive, as in the first years the bank will charge a fixed repayment much higher than you'd pay with a variable rate.<\/li>\n
- Fees:<\/strong>\u00a0partial and full early repayment fees are higher on a mixed-rate mortgage than a variable one. So if you plan to make early repayments, a mixed-rate mortgage may not suit you.<\/li>\n
- Stability:<\/strong>\u00a0although for part of a mixed-rate mortgage's life the client enjoys a fixed repayment, sooner or later they'll face a variable repayment depending on where Euribor stands at that time and the margin their bank charges.<\/li>\n<\/ol>\n
As we've explained, a mixed-rate mortgage has a fixed rate for roughly 10 years and a variable rate for the rest of the term. So you might think it combines the advantages of fixed and variable-rate mortgages.<\/p>\n
The reality, however, is very different. As they're designed,\u00a0mixed-rate mortgage loans benefit the bank and harm the client<\/strong>. Here's why:<\/p>\n\n- Because you won't benefit from today's low Euribor<\/strong>. As your rate will be fixed for the first years, this type of mortgage doesn't let you take advantage of low Euribor to get cheaper repayments.<\/li>\n
- Because it won't protect you from possible Euribor rises<\/strong>. This index is very likely to rise over the coming decades. By then your rate will be variable, so your repayments will go up.<\/li>\n<\/ul>\n
Our advice, therefore, is that\u00a0if you want lower repayments in the first years<\/strong>\u00a0and can absorb a possible rise in Euribor,\u00a0a variable-rate mortgage is better value<\/strong>. On the other hand,\u00a0if you don't want any surprises<\/strong>\u00a0in your monthly repayments for the whole term,\u00a0a fixed-rate mortgage will always be a far more advisable option<\/strong>\u00a0than a mixed one. Bear in mind that when you take out a mixed-rate mortgage, you can't know which way Euribor will go after the first 10 years.<\/p>\n
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