Many of the people who have not yet bought any property before when it comes time to search and buy a new home feel a little lost in the best way to finance this purchase. In the case of doing it by mortgage, the question is do I need a fixed mortgage or a variable mortgage? In recent years it has already begun to know mixed type mortgages that combine the two types. But to know which is the perfect mortgage there is no correct answer, since it will depend on each buyer and their profile and the years of loans. Another factor to take into account when choosing between a fixed mortgage or a variable mortgage is the risk tolerance of each buyer.
People with a more stable "character" usually decide on the peace of mind that gives them the fixed installment of a fixed-rate mortgage, but people with less predilection for tranquility or with more knowledge in the market, usually opt for the variable mortgage. We as a real estate agency in Obra, Moraira and surroundings can advise you on the tranquility of the residential areas of the Costa Blanca, but on the tranquility that you should endure with the mortgage no. But now we are going to explain in a detailed and easy way the characteristics of each mortgage so that you can talk to the manager of your bank in a clearer and safer way.
In this type of mortgage the installments fluctuate depending on the value of Euribor. The bill to be paid each month will be modified according to this index. If we are in a context where interest rates are low, the monthly fee will be reduced. However, it also carries a certain degree of uncertainty, because the bill to be paid can vary both downwards and upwards. As this index is variable and if the mortgage has a very long life, it can mean a large interest outlay. If we put ourselves in the current context, year 2022, the Euribor is at minimums, therefore right now it will be more advantageous to have a variable rate mortgage. But as you have been able to read, this index can vary over time becoming an undesirable option for those who avoid risks and for those who plan a purchase with a very extensive loan over time.
Buying a home with a fixed mortgage
On the opposite side of the variable is the fixed mortgage, which as its name suggests, the monthly payment will not vary, since in fact, this condition is signed before a notary from the same day it is purchased. The only way to reduce the fee if the buyer decided to amortize something of the loan in advance.
Buyers with more conservative profiles, who flee from risk, this is the preferred option. Normally fixed mortgages are subscribed with mortgages that have a very long life, between 20 and 30 years.
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