Banking is trying to convince customers with mortgage loans to switch to fixed rate. But for now, not worth it, analysts warn, as the Euribor will remain low
The delivery of the house will fall another ten euros already in March for loans indexed to euribor six months. With the drop in interest rates to increasingly negative values, the bank tries to convince credit clients to housing to switch to fixed rate. This might be a good long-term option, but if they do have, will lose money, warn analysts.
The six-month Euribor, the most used in Portugal on housing loans, hit a new historic low of -0.129% (see chart); and even the rate at 12 months is already in -0.017%, crushing the profit margin (spread) of banks. The result is in sight: pay the house has never been cheaper
According to a simulation carried out by Deco / Money & amp; rights, taking into account the values of Euribor until day 25, a family with a loan. 150 thousand euros to 30 years, indexed to Euribor six months and with a spread of 1%, will pay 474.64 euros per month from March. Are less 10.86 euros than the amount paid in September, the latest revision.
Despite the negative interest already are being slaughtered at spreads, banks are lending more money. In December, according to data from the Bank of Portugal, the new credit operations to housing amounted to 469 million euros, an increase of 13.5% over the previous month and the highest since May 2011. Accounts made, banks They lent in 2015, an average of EUR 334 million per month for the purchase of home; in 2014, the average was 193 million and in 2013, 170 million.
Fixed Rate? not does
It is true that the credit tap is looser, but the historically low levels of interest have led the bank to seek more cost-effective solutions for mortgage loans. Millennium BCP, for example, is now sending letters to customers to propose switching to a fixed rate. “Because we know that the surprise of the variation in rates can not be very pleasant, we offer you now the possibility to change, at no cost, to one of our Fixed Rate Solutions 3.5 or ten years,” reads the letter the bank to which the DN / Mad Money had access.
BPI, CGD and Santander Totta have not yet taken such an initiative, but also have products at a fixed rate. Deco, the association of consumer protection, claims to have the “perception of greater publicity for the banks at a fixed rate, especially since the end of last year.” One realizes why: Currently, only BCP and Montepio present loan solutions Euribor six months; the remaining banks have only have offers 12 months.
In any case, it makes sense to switch to fixed rate now, consider analysts surveyed by DN / Mad Money. “Interest rates are historically low and will not rise anytime soon. In the next three to four years, we will continue with low rates, and even in negative territory, there is no doubt”, assures João Pereira Leite, head of investments Banco Carregosa. And remember that all analysts predict that the next meeting of the European Central Bank (ECB) on 10 March, Mario Draghi is expected to announce a further cut in banks’ deposit rates in ten basis points.
Deco does not advise the exchange. The economist Nuno Rico recognizes that a customer who does not feel comfortable with “the instability of having to pay a different amount every month” should opt for fixed rate, but points out that, “at this time, the variable rate remains much more advantageous “. According to a Deco study comparing the two rates, a customer with a home loan of one hundred thousand euros with a maturity of 20 years and fixed rate would eventually pay at the end of this period (and assuming current market conditions maintain), more than 18 000 euros a client with indexed to Euribor credit.
with Sandra Almeida Simoes
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