According to statistics from our financial expert, the impact of interest rate spreads on the arrival of consumer-friendly loans.
On the basis of the high average, well-chosen loans became 0.5% cheaper. The truth is that there are also significant differences between qualified consumer loans.
For more than 1 year, a survey has been conducted of the available interest rate surcharges per home loan. This has been repeated now, and in June 2018, it has been assessed how much the situation has changed for those who are now taking out a home loan.
The initial interest rate on home loans consists of two parts:
- the reference rate, which is not influenced by the bank, is influenced by an external factor, such as government securities or BUBOR.
- the interest rate premium set by the bank taking into account all its risks. This includes the risk of default and the bank’s profits.
Before, we could find interest rates higher than 5%, but since the introduction of consumer-friendly loans and the introduction of the 3.5% cap, the mortgage market has been trying to adapt. It was noticeable that even loans that traditionally could not qualify because they have interest rates of less than one year were marketed with lower interest rates.
Let’s look at some examples above.
For an average customer, 48 loans from 2 banks are available.
- only 3 out of every loan (6.25%) have a higher premium than 3.5%,
- even if the interest rate cap was 3%, 70% of the loans would still meet this condition,
- loans with a fixed interest rate of at least 3 years have both consumer-friendly and unqualified loans, one of the best loans in their category being consumer-friendly loans,
- those with a rating range from 1.8% to 3.1% on their spreads, while those without a rating range from 2.0% to 3.6%.
Comparing the options a year ago and the current one, we can see that before, the spread on loans that could even be rated as consumer-friendly typically ranged from 2.5% to 3.5%, whereas by now it has become commonplace at 2-3%. Moreover, in some cases, interest rates have fallen below 2%, unprecedented.
Nowadays it is not enough to pay attention to the rating of a home loan because there are significant differences within a given interest period.
If we make the right choice, we can win up to 1 percentage point in the interest rate premium, which gives us 1 percentage point more favorable initial interest.
If we take 10 million for 20 years with a 10-year interest period,
• then at a starting interest of 6%, the total repayment will be 17.2 million,
• while at 5% it is $ 15.8 million.
That is, we gain 1.4 million over 20 years by being attentive and choosing the cheaper qualified loan product.
The big decision in our lives is to make a home loan, prudent, foresighted, thoughtful and responsible.
We would also like to help you with the administration, we can offer different current loan offers without having to visit several banks. We offer free, convenient, fast, reliable administration, and our credit intermediaries are guaranteed to offer such facilities as banks.