The rise of the Euribor, the index to which most variable rate loans refer, has experienced an unprecedented ‘rally’. The benchmark index was trading in negative territory just a year and a half ago, while it has now increased by 4.10% after the last increase in interest rates. This has caused many mortgage holders to consider taking their credit to purchase a home to another entity with the aim of paying less each month.
Thus, some people have decided to take advantage of mortgage subrogation, that is, both the debtor and the financial entity of a mortgage loan can be substituted or replaced by another debtor or another financial entity. And it seems that this is the option that mortgage holders are choosing, since only 2% of mortgage debtors have chosen to renegotiate the conditions with their bank.
What are the best offers for bank subrogation?
From Kelisto they report 4 variable rate subrogation offers that are very attractive for the current conditions experienced by banking entities. The one that offers the best conditions is the Open Bank Variable Mortgage with a 0.59% differential on a fixed interest of 1.60% with 12 months of fixed exit interest. The EVO Banco Smart Variable Mortgage offers a spread of 0.48%, and a fixed exit interest of 2.2% for 2 years. ING with its Orange Mortgage has a spread of 0.59%, and a fixed exit interest of 2.55% for one year. Finally, MyInvestor has a spread of 0.89% on a one-year fixed exit interest rate of 1.59%.
In the case of the best fixed rate subrogation, the comparator once again points to the same banks. Openbank offers with its Fixed Mortgage product – up to 80% an interest of 3.07%, EVO Banco with the Smart Mortgage 3.335%, the MyInvestor Fixed Mortgage has 3.69% and in the case of ING, 3.85% of the Orange Mortgage.
However, according to Pedro Ruiz, the personal finance expert at Kelisto.es, it is necessary to highlight that banks do not usually advertise the conditions of these offers so it is possible that there are better ones. In addition, sometimes there are banks that do not offer subrogation, but rather the cancellation of the old one and the opening of a new one. If the proposal is very attractive they can be more profitable.
Carrying out a mortgage subrogation is not free, it involves expenses that include 4 items: appraisal, notary, management and registration. The client only has to pay the appraisal of the house, the rest of the costs are borne by the banking entities. Some banks include the subrogation fee and the opening fee according to their policy.
Although in times like the current one with the highest interests since 2001 and with the payment of the aforementioned costs, subrogation offers great attractions. Pedro Ruíz points out that the most important are the improvements in conditions if a lower interest rate is paid or if security is gained by moving from a fixed-rate mortgage to a mixed one.
