Variable rate mortgage converted to fixed

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This topic contains 7 replies, has 4 voices, and was last updated by Profile photo of GarySFBCN GarySFBCN 7 months, 3 weeks ago.

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  • #190355
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Sabadell offered and I accepted the conversion of my variable rate mortgage with a floor (suelo) to a fixed-rate mortgage.

    This offer was extended last month before yesterday’s ruling regarding mortgages with floors.

    The old mortgage had a floor of 4.25%.  The new mortgage is fixed at 2.5%.  There were no fees, and none of the other terms of the mortgage changed.  The time and amount remaining on the old mortgage is the time and amount remaining on the new mortgage.   The monthly payment is now lower because of the lower interest rate.

    I got the old mortgage in 2012, when it was nearly impossible to get any mortgage.  While I’m pretty sure that, interest-wise, I could probably find a rate better than 2.5%, I’m fine with how this was handled by the bank.

    I’m not one to praise banks, but, so far, working with Sabadell has been good.  We have the type of account where there are no fees for transferring money into or out of the account which has saved a lot of money and aggravation.  Their on-line services are more than adequate and the people I’ve worked with have been competent and accommodating.   I’m sure that this varies from office to office, but so far, it’s been great.

  • #190393
    Profile photo of Mark Stücklin
    Mark Stücklin
    Keymaster

    Hi Gary,

    That’s good to hear. Nice to know someone is getting a good service. You’ve cut your interest rate almost in half.

    2.5% fixed rate is an excellent deal. I’m not sure you would be able to do better. Best I’ve seen recently is 2.75% for 20 years max 70% LTV.

  • #190445
    Profile photo of marios
    marios
    Participant

    Gary I would be interested to know what type of account you have, Sabadell don’t charged for sending money in but we do get charged for every payment we make to another person.

  • #190451
    Profile photo of marios
    marios
    Participant

    Thanks for that Gary.

  • #190508
    Profile photo of Pazza
    Pazza
    Participant

    Hello Gary,

    Just spotted your post. I too received an offer from Sabadell to convert my mortgage from variable to fixed. Unlike you though, they only offered to fix at the current minimum of 4.25 %.

    I have so little trust in Spanish banks due to previous bad experience of being tied to an insurance policies that was not wanted or needed, I declined their offer.

    Thanks

     

  • #190509
    Profile photo of Pazza
    Pazza
    Participant

    Ah the penny drops! I was right to think the Bank would never do anything voluntarily to help me. I have just seen the ruling that the practice of capping the minimum interest rate payable was made illegal by the European Court of Justice.

    In my case when I took out the mortgage the estate agent that arranged it conveniently removed details of the cap from my mortgage offer. As the sale was completed in my absence (PoA) I didn’t find out about the cap till much later, when interest rates fell and my mortgage barely did.

    A quick search on the Web brought up a company called Lexland, claiming to assist in the process of reclaiming interest overpaid. Sounds a bit like the PPI fiasco. Anyone heard of this company or their likely fees? Would I be better approaching my original lawyer in Spain, that completed on the house?

    Thanks

     

     

     

     

  • #190515
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Pazza, I’ve never heard of Lexland.  I’m sure there are difference from office to office in most banks, but I believe that we were offered the lower rate because of the lower risk – our place has kept it’s value since 2012 (probably increased some because of major improvements) and also I have been making extra payments so the amount left on the mortgage is about half of the original purchase price.

    • This reply was modified 7 months, 3 weeks ago by Profile photo of GarySFBCN GarySFBCN.

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