Mortgages are bank products that condition our family finances for years. Therefore, before hiring one, it is vital to know which is the cheapest or the one that offers us the best conditions depending on our needs and our personal and economic situation.
Fortunately, and thanks to the development of the Internet, we currently have applications that allow us to analyze mortgage products from our home. In fact, today practically all banking entities have a mortgage comparator on their web pages.
What is the problem with bank comparators?
The problem is that, sometimes, these bank tools are not completely transparent and offer us partial or very generic information, so we must consult directly in an office the real conditions of the product and the specific clauses of the fine print.
Even so, some banks, especially those that market their products online, tend to present the information in a very clear and transparent manner, aware precisely that this point plays in their favor over their competition.
On the other hand, when using these tools, we find another limitation and that is that they focus only on the products of one entity and, generally, what we need is to compare the offer of several banks to know all our options. And not just Banco Santander mortgages, or BBVA mortgages, for example.
In these cases, the best option is to look for an external mortgage comparator, that is, one that is not from any bank. Even so, to consult the specific conditions, we will have to resort to the websites and the banking entities.
Advantages of using a mortgage comparator:
Regardless, using a mortgage comparator also has many advantages. A mortgage comparator is an online tool, generally free, that allows you to compare the mortgage products of various banks. Its operation is simple and intuitive, and does not require specific knowledge of finances.
The data that we must enter in a mortgage comparator are the following:
- Why do we request the money (buy a habitual home, acquire a second residence, change the bank mortgage, reunify debts, etc.)?
- What interest rate we are looking for (fixed, variable or mixed).
- What is the value of the property we want to buy?
- How much money do we need (amount of the mortgage loan).
- What is the repayment term that suits us (that is, time in which we want to pay the mortgage)?
In some cases, the tool also allows us to enter other data such as the province where we want to buy the property or if the home is new or second-hand.
The main advantages of using a mortgage comparator are:
- The user knows all the alternatives according to their interests.
- They are “neutral”. Many mortgage comparators do not depend on banks and usually have opinions from other users, so aspects of the relevant fine print are detailed. For those who want to take out a mortgage, this is synonymous with transparency and security.
- For banks, an online mortgage comparator is a very useful tool, as it becomes a showcase in which their products can stand out from the rest.
As you already know, taking out a mortgage is not always easy and only clients with financial solvency have access to the best offers from entities. That is why more and more people are analyzing these offers on the Internet. And while it’s more of an information issue today, things may change in the future. In fact, in mature online markets 54% of users already purchase online products including insurance and banking products such as mortgages.
In any case, to compare mortgages in a more secure way, we recommend that you use all the means at your disposal, that is, collect the information with a mortgage comparator, visit the web pages of the different entities and analyze the offers that interest you the most. specifically in a branch.
Elements to consider when comparing mortgages
When we compare mortgages, we must assess a series of aspects:
The minimum and maximum amount they offer and the financing percentage
As a general rule, banks do not finance 100% of the amount of a home. In the case of habitual residences, they cover a maximum of 80% of the appraised value and, in the case of second residences, up to 70%.
This means that, to request a mortgage, we must have some savings that guarantee the full payment of the property, an amount that can range from 20% to 40% depending on each case.
On the other hand, banks usually put minimum and maximum limits on their mortgages. For example, there are products in which the minimum loan is € 30,000 and the maximum is € 300,000. This means the bank is not going to grant us a mortgage for more value. Knowing this money limit is important, since there is no use shuffling a mortgage that does not grant us the money, we need to buy a house.
The repayment terms
This term determines the monthly fee that we are going to pay and for how long. The lower the installment, the longer the loan repayment term will be and, therefore, the more interest we will pay. The ideal is to contract the mortgage for the shortest possible term, although we must always be clear about the maximum monthly amount that we can assume to meet the payments with solvency.
The interest rate
The interest rate determines the final cost of the mortgage and determines the amount of the monthly installments. It is also one of the few aspects that you can negotiate with your bank to obtain better conditions for your loan.
There are three types of interest:
- Fixed. It is the easiest to compare. The best option is to choose the one with the lowest TIN. This means that you will pay less interest and that the fee will be the same throughout the repayment period.
- Variable. With the variable interest rate, it is more difficult to compare several mortgages. Although they all use the Euribor plus a differential as a reference and it is normal to choose the mortgage in which it is lower, we must take into account other elements such as the APR.
- Mixed. Comparing mortgages with a mixed interest rate is difficult because we must compare the fixed rate period (3, 5 or 10 years), and the variable rate one.
When comparing mortgages, we must assess whether the bank charges us commissions for opening, for total or partial withdrawal, for subrogation or for novation. Although it is not a determining factor, it must be taken into account: if two mortgages offer us the same conditions, it is normal to choose the one that has lower commissions. In fact, there are totally commission-free mortgages.
Many times, the granting of a mortgage is subject to the contracting of other products linked to the banking entity such as insurance, pension plans, direct debit of income, etc. These products should also be considered when comparing mortgages, as they can make the amount of the mortgage loan very expensive.
Comparing mortgages is not always easy. Before hiring one, we must assess many aspects and a mortgage comparator is a good way to do it. In some cases, it is advisable to consider the option of hiring the services of a mortgage advisor or a company specialized in the sector.
If you have questions about which mortgage is best for you or about the type of home that best suits you, contact us. From Sky Marketing we can help you!