There are 3 main criteria:
With mortgage loans, we also consider the estimated value of the property you offer as collateral. The loan amount may be up to 80% of the property value and up to 100% of the sales contract price.
The loan term and the grace period.
The term affects the instalment and interest. As the term becomes longer, the instalment becomes lower, but interest goes up. When choosing your loan term, you should consider whether you will be able to pay your instalments in case your income changes unexpectedly.
The grace period is there to help you with your first housing expenses, especially if you are building your house. You can choose a grace period up to 24 months. During this period you may pay only the interest or not pay anything at all. However, in this case, the interest will be incorporated in the loan amount. This means that overall you interest will be higher.
Lower interest rates and a longer repayment term.
A floating interest rate consists of:
The base rate (usually 3M Euribor) + spread).
The spread is fixed throughout the loan term. However, the base rate changes daily in the interbank market. This means that each month your instalment increases or decreases according to the change of the base rate and, consequently, the floating rate.
A market reference rate. Specifically, the rate at which the EU banks borrow funds from the interbank market, without collateralisation. Euribor is calculated for different maturities (1 week, 1, 3, 6, and 12 months).
The European Money Markets Institute(EMMI) is responsible for its management.
A percentage added to the base rate, to calculate the overall floating interest rate of your loan.
The spread is determined at the beginning of your loan and remains fixed throughout the loan term.
A fixed interest rate does not change throughout a specified period, agreed upon from the beginning. Especially with consumer loans, its remains fixed throughout the term of the loan.
A floating interest rate follows the changes of the base rate, leading to a corresponding change in the amount of your instalment.
The one that best fits your needs. If you wish to:
It is the actual total cost of your loan or any other credit you have obtained. It includes the interest, levies and other loan expenses you will pay expressed as an annual percentage of the total loan.
The APRC makes it easier for you to compare different offers.
Yes, you can switch from a floating to a fixed interest rate, and vice-versa, provided it is specified in your agreement.
However, there will be extra charges if you ask to:
