All real estate sources agree with your latest data in the brick sector: more flats are sold, therefore, more mortgages are granted. Specifically, it is signing 17% more mortgages than a year ago, according to the General Council of Notaries, but how to choose the one that suits us? Here are some tips.

Look at the APR

The easiest and most effective way is to compare mortgages by TAE: The APR is the Annual Equivalent Rate, a measure precisely created precisely to simplify the comparison of offers between several banks. If the mortgage is variable it is often called Variable TAE, because it is referenced to an index that raises and lowers its price (such as Euribor).

The APR is the total cost that the bank will charge us in a year. To calculate their value is added everything: the interest of the mortgage, commissions, insurance and related products, plus some opening expenses.

There may be two very similar mortgages (same interest, commissions and number of related products) but apply a different APR, why? Because in order to calculate their APR they do not use the same values ​​because in the TAE also influences factors like the term that is used to make the calculation or the requested capital.

So you have to read the fine print and see what variables have been taken into account to calculate the APR to see if it can be compared to another.

The APR is also a useful tool to know if the mortgage is very swollen costs and commissions. To do so, calculate the difference between APR and interest.

If it is a variable mortgage, follow these steps:

• Adds the value of the current Euribor to the mortgage spread.
• Subtract this interest from the APR.

Negotiate every point of the mortgage

When you have the offers of different banks, you can go to each one with the best offers from the competition to get them to match or improve.

Remember that mortgage loans are open to negotiation depending on your financial profile and the guarantees you can offer the bank. The commissions, the bonds required, the interest on the mortgage … all that can be changed by the bank if you trade well.

Interest rate

It is the first thing we should look at: the interest rate that we are going to apply. If it is a fixed rate mortgage, it is very easy to compare with another one that is also fixed rate.

If the mortgage is variable then we have to fix the reference rate they use (usually the euribor) and compare the mortgages with the same reference. In the first year or six months the mortgage will normally have a fixed interest, but then it will change to interest + the referential. Study the benchmark that suits you according to your historical evolution to decanters for one or the other.

Minimum and maximum deadline

The older you have your mortgage, the less you will pay in your monthly installment, but you will end up paying more interest.

Amount of purchase and valuation

You should keep in mind if the mortgage has a minimum or maximum limit of the amount to be granted. There are mortgages designed for expensive homes and mortgages designed for cheap homes, look at mortgages that fit your pocket.

You should also see what is the limitation of the amount they will grant us based on the value of the guarantee, the house we buy. There are different options:

• 100% appraisal: it finances 100% of the sale and the expenses.
• 80% of appraisal: if you buy very cheap you could also get to finance 100% more expenses.
• The lowest value between 100% of the sale and 80% of the appraisal: you have to have saved money to pay for expenses (10% of what the apartment costs).
• 80% of the lowest value, between sale and valuation: this is the most restrictive case, since 20% of the purchase plus the expenses must be provided, in the best of cases.
• It is very important to have an estimate of the appraisal to know if we can compare a particular mortgage or is outside our needs and possibilities.

Personal requirements

There are mortgages that are only offered to a group, such as young people, civil servants … If you do not meet those requirements, you are out.

Commissions

In addition to the interest rate, commissions increase a mortgage significantly. The ideal would be to hire a mortgage without commissions, but many times it is not possible. Here are the main things to keep in mind:

• Opening Committee: may exceed 1% of the amount granted.
• Commissions for total or partial cancellation (now compensation for withdrawal): limited by Law to 0.5% in the first 4 years and to 0.25% thereafter.
• Commission for subrogation cancellation: what we are charged if we change banks.
• Interest rate risk compensation: for mortgages at fixed rates.

Additional products

A cheap mortgage by interest rate can end up being expensive if you require the hiring of many linked products. The most common are: domiciliation of the payroll, contracting with the insurer of the home and health insurance bank, minimum spending on credit card, contributions to pension plans or investment funds and direct debiting of domestic receipts.