How to choose a mortgage? Discover the keys

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Knowing how to choose a mortgage is key to getting good conditions to buy a house . But first you will have to be clear about some points to choose the best offer. In today's article we will talk about how to choose a mortgage.


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Key points to know how to choose a mortgage
Type of interest
There are three types of interest that we can contract for a mortgage: fixed, mixed and variable. The interest will directly influence your loan payment, it is essential that you weigh the options well and calculate the total mortgage interest. It is a commitment of many years and if later you want to change the conditions, you will have to do a subrogation or novation, which entails a whole series of expenses and procedures.

Fixed interest rate. It is the mortgage that carries the least risks, the payment remains fixed throughout the loan, so there will be no surprises. It has the advantage that if the Euribor rises, it will not affect you and you will know what installment you will have to pay each month, but the drawback is that you normally end up paying more than with a variable mortgage .
Variable interests. Variable interests carry a greater risk, since it is linked to the Euribor. It is currently at negative values ​​and experts say that it will remain that way for approximately five more years. During these years, those mortgaged with variable interests will benefit and will pay a lower payment. But, the moment the Euribor rises, your fees will rise. This is the risk of variable interest loans
Mixed mortgage. During the first years the loan will have fixed interest and from a point on the interest will become variable.
As a result of the coronavirus and the impact it has had on the economy and the Euribor, banks are encouraging both fixed and variable mortgages, so it is more difficult to find entities that have mixed mortgages .




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Amortization period
The loan repayment period is also very important. The more years, the lower the monthly payment, but you will also pay much more in interest. It is important to keep this point in mind, if you want the mortgage to last 35 or 40 years to have a lower payment, you have to calculate the interest and how much you would pay in total at the end of the life of the loan.

Linked products
After the New Mortgage Law , entities cannot force you to contract linked products in order to contract a mortgage. But they can offer them to improve the conditions of your mortgage.

Keep in mind that linked products involve an extra cost, which you may have to pay monthly, annually or in a single installment when taking out the loan. You will have to see the breakdown of the cost of the product and the advantages that having it contracted offers you, so you can assess if it is worth it to improve the conditions.