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Hi Mark,
The bank I use Caixa Laietana on the costa brava told me a couple of days ago, that they do not use the euribor rate but another spanish rate which I can not remember the name of. Anyway their current mortgage rate is 5.2% so much for the government trying to help. Do you know the name of this spanish rate and why is it not following the euribor.
Les Lions[/b] -
They maybe using MIBOR, which is Madrid interbank rates, they track the Euribor rates & in some cases lower than the Euribor rates. Your interest rates are probably set on a yearly basis, so until your next anniversary you rate will not change.
” In so far as Government helping. How old are you ???????. Besides the help if you are talking about Spanish Government that it all directed towards residents & basically Spaniards. Wake up & smell the coffee.
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I read an article in Sur in English today, do not have it now but it said that 9 out of ten mortgages willnot have a reduction even though the euribor has dropped. Says that most mortgages have written in the small print that the euribor is fixed at 3% and there is also a ceiling too.
Oops Mark wrote it first in news and views
http://www.spanishpropertyinsight.com/buff/2009/03/euribor-hits-all-time-daily-low/
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@katy wrote:
I read an article in Sur in English today, do not have it now but it said that 9 out of ten mortgages willnot have a reduction even though the euribor has dropped. Says that most mortgages have written in the small print that the euribor is fixed at 3% and there is also a ceiling too.
The interest rate reduction has been made to save the banks, not their costumers! Banks will happpily get a good profit paid by us, the taxpayers.
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Posted: Fri Mar 20, 2009 10:28 pm Post subject:
I read an article in Sur in English today, do not have it now but it said that 9 out of ten mortgages willnot have a reduction even though the euribor has dropped. Says that most mortgages have written in the small print that the euribor is fixed at 3% and there is also a ceiling too.
I have looked at mine with banco halifax and it has no lower limit but an upper limit of 12%
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@les lions wrote:
Hi Mark,
The bank I use Caixa Laietana on the costa brava told me a couple of days ago, that they do not use the euribor rate but another spanish rate which I can not remember the name of. Anyway their current mortgage rate is 5.2% so much for the government trying to help. Do you know the name of this spanish rate and why is it not following the euribor.
Les Lions[/b]Hi Les,
Many credit institutions use indexes different from Euribor, some of the more common follow:
-CECA
-IRPH Bancos (this is quite common for mortgages)
-IRPH Cajas
-IRPH Promedio
-MIBOR (this is kind of “deprecated” these days)Since you are a customer of Caixa Laietana my bet is that they are using IRPH (more likely) or CECA.
IRPH is now much higher than euribor, but I think it will steadely come down
Here you have a table of some of this indexes
Hope this helps
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Dear Xabi,
Thank you for the info. It really is useful. This all came about when we approached our bank to extend our mortgage period, to reduce our monthly payments. They were not interested in helping us, I made it very plain over several visits to the bank that we are not asking you to lend us 1 euros just give us more time to pay which means more money to the bank. How strange the way they treat us. Maybe I should start a new topic with this.
Les Lions -
@les lions wrote:
Dear Xabi,
Thank you for the info. It really is useful. This all came about when we approached our bank to extend our mortgage period, to reduce our monthly payments. They were not interested in helping us, I made it very plain over several visits to the bank that we are not asking you to lend us 1 euros just give us more time to pay which means more money to the bank. How strange the way they treat us. Maybe I should start a new topic with this.
Les LionsCouple of things on that: If you are paying 5.2 % you are paying much more than most, you really should look into a rate change not just a mortgage extension.
I don´t know what your personal situation is, but I would definitely shop around for mortgages, spanish people are getting anywhere between Euribor+0.4 to Euribor+1.5 (which amounts between 2.4% and 3.5 % now) maybe you should aim for that.
It my be of some confort that if your payments are indexed by IRPH this index is set to come down over the next few months (it tracks the euribor but reacts a lot slower).
Good luck
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I have just asked my bank what my rate would be at current Int rates which I think is the monthly euribor and he quoted
‘according with the new rates 3,87%’so that takes account of 1.25 extra plus 2.622 on top so that would work out correct to Jan int rate on xabi chart,thanks for that xabi so it will come down to 2,135 and for me 3.260 with the 1.25 on top.It still has further to fall.
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Shakeel
Take a look at this chart ( http://www.irph.es/) jan Euribor rate is 2,622,I have to pay according to my terms and conditions an extra 1,25 on top of that which is about the norm for a morg provider which brings it to 3,87.
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“recently changed my mortgage to Int only but a condition “
THIS IS INTRESTING AS SPANISH BANKS DONT DO INTEREST ONLY MORTGAGE APART FROM HALIFAX. EVEN HALIFAX ARE/WERE DOING FOR A FIVE YEAR PERIOD. WHO IS YOUR LENDER CAN YOU PLEASE PM ME THEIR DETAILS. DID YOU HAVE TO GO TO THE NOTARY FOR THIS CHANGE OVER ?“was that we took out life policys to cover the mortgage even though we have plenty of equity, can they do this”
AS YOU PROBEBLY KNOW THAT I DONT TAKE VERY KINDLY TO BANKS BUT IN THIS I AGREE WITH THEM. AS THEY SEE THAT THEIR CAPITAL IS NOT BEING REDUCED & IF SOMETHING HAPPENS TO YOU THAY DONT WANT TO THROW YOUR FAMILY OUT TO RECOVER THEIR MONEY. OF COURSE THEY GET COMMISSION FOR THE SALE OF THE POLICY.as it just seems another money grabbing scam from the banks.
IN THIS INSTANCE I DONT SEE THIS AS A SCAM.
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“recently changed my mortgage to Int only but a condition “
THIS IS INTRESTING AS SPANISH BANKS DONT DO INTEREST ONLY MORTGAGE APART FROM HALIFAX. EVEN HALIFAX ARE/WERE DOING FOR A FIVE YEAR PERIOD. WHO IS YOUR LENDER CAN YOU PLEASE PM ME THEIR DETAILS. DID YOU HAVE TO GO TO THE NOTARY FOR THIS CHANGE OVER ?Yes mines the Halifax but I am pretty sure spanish banks do it as well but I stand corrected
“was that we took out life policys to cover the mortgage even though we have plenty of equity, can they do this”
AS YOU PROBEBLY KNOW THAT I DONT TAKE VERY KINDLY TO BANKS BUT IN THIS I AGREE WITH THEM. AS THEY SEE THAT THEIR CAPITAL IS NOT BEING REDUCED & IF SOMETHING HAPPENS TO YOU THAY DONT WANT TO THROW YOUR FAMILY OUT TO RECOVER THEIR MONEY. OF COURSE THEY GET COMMISSION FOR THE SALE OF THE POLICY.as it just seems another money grabbing scam from the banks.
IN THIS INSTANCE I DONT SEE THIS AS A SCAM.
They were quite happy before so why the extra now,its only a 2yr Int free and I had valid reasons to do with getting my occupation licence the ba**tard spanish beauracracy and political party issues.
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@marios wrote:
They were quite happy before so why the extra now,its only a 2yr Int free and I had valid reasons to do with getting my occupation licence the ba**tard spanish beauracracy and political party issues.
Spanish banks normally offer periods of “interest only” we call it “periodo de carencia”, during which, as it is obvious, you pay interest only. Many banks do it, or at least used to do it.
here is a link I googled, in case it is useful, it is a bit out of date, but worth a try.
http://www.bankimia.com/hipotecas-para-pagar-menos-al-principio
Making the customer sign up fo life insurance is fairly common practice here. Even with a normal (no – carencia) mortgage
Regarding the spreads (we call it “diferencial”) I can tell you that 0.5 is not uncommon for spanish customers (I got an offer below that as of last week) I have no idea if they will offere foreign nationals the same terms, i don´t see why should not, but I am not a bank manager.
One thing I have never found in Spain is the “offset mortgages” where you pay interest only on the difference between balance and savings… I´d like to know if anyone found one.
Regards
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If you can understand Spanish, this is the latest document concerning mortgages
in January 2009.If you go to the page 3, you see that the average interest is going up, and currently is between 5.63 and 5.72 per cent.
So your 5.2% is an excellent rate.
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“One thing I have never found in Spain is the “offset mortgages” where you pay interest only on the difference between balance and savings… I´d like to know if anyone found one”.
The banks will not be able to monitor this. consumers will not know whether they are coming or going. A perfect ground for the banks to fleece its customer. Spanish commercial/political world survives on confusion and the remaining members of the society on civil service and paper chase. .
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@shakeel wrote:
“One thing I have never found in Spain is the “offset mortgages” where you pay interest only on the difference between balance and savings… I´d like to know if anyone found one”.
The banks will not be able to monitor this. consumers will not know whether they are coming or going. A perfect ground for the banks to fleece its customer. Spanish commercial/political world survives on confusion and the remaining members of the society on civil service and paper chase. .
Of course, I understand… since spanish customers are stupid and they are not able to perform even the most basic arithmetical operations how can you expect them to calculate the interest generated by the principal owed minus the moneis in deposit this would allow the banks to fleece them?
This makes it even more surprising that spanish banks havent tried this trick yet, natural born cons that they are! it would be so easy for them to overcharge their customes, and of course the spanish consumer office, being lazy and corrupt would not say a word about it.
Hang on a second… the spanish banks haven´t tried this yet because they are, in turn, stupid and lack the innovative energy to put forward new products or the intelligence to monitor the process.
Of course bristish cosumers, being much more intelligent, can take full advantage of offset mortgages and british banks being far more efficient and innovative than their spanish counterparts can offer offset mortgages knowing that their clever customers will appreciate them.
Funny how many “smart” english banks are having to be being bailed out by the british taxpayer and how the “stupid” Santander had to buy out british banks.
Funny also how “stupid” building company Ferrovial is being forced by the british government to sell their one of their london airports and at least two more in the rest of England and Scotland you are yet to hear the spaniards moan about it. I´d like to see what the Brits would say if the opposite was happening.
But of course, spaniards are lazy and innefectual, their companies thrive in confusion and their system is corrupt how could they hope to compete in an open and unregulated marketplace such as the (ahem) british market.
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@flosmichael wrote:
If you can understand Spanish, this is the latest document concerning mortgages
in January 2009.If you go to the page 3, you see that the average interest is going up, and currently is between 5.63 and 5.72 per cent.
So your 5.2% is an excellent rate.
Ok, if the INE says so, 5.2% may be a decent interest rate. However, I would definitely try to speak with a number of banks (not just Caixa Layetana) and see what happens.
For reference, this is front page news in El Pais today.
“Banks and Cajas offer tempting conditions to take prime mortgage customers off each other”
I think Les should attempt to negotiate, nothing to lose anyway.
Good luck.
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Before, I go any further Xabi, at least I am not comparing English against & Spanish, which ne is good or which bad. I am stating facts on the ground & in this instance facts in Spain.
“Of course, I understand… since Spanish customers are stupid and they are not able to perform even the most basic arithmetical operations how can you expect them to calculate the interest generated by the principal owed minus the monies in deposit this would allow the banks to fleece them? “
Its not a question of simple calculation of interest rates. There is the compounding effect, cash paid in for which you should get immediate value as appose to cheques, which needs to be cleared and this take time. Not every customer in any country will sit down and calculate on a daily, weekly, monthly basis of their debit/credit entries that affects their interest calculations and here comes the confidence & perception. Even Spanish people will tell you that their banks are theives.
“This makes it even more surprising that Spanish banks haven’t tried this trick yet”
The Spanish Banks are not innovative and they feel that they don’t need to as they have been getting away with it. I was being asked to pay €500 to clear a “cheque Bancario” for a cheque of €200,000 that I wanted to credit to my account. If I had paid in cash €200,000, this would have been free. After shouting & screaming in the foyer of the Bank it was reduced to €100, Why ???? The cost to clear this cheque would have been the same if this cheque was €10.
“it would be so easy for them to overcharge their customers,
My example above and of course the Spanish consumer office,”What consumer office ? its job for a funcionario, they are ineffective, you be lucky to find them in their offices or have capacity to resolve.
“being lazy and corrupt would not say a word about it.”
Some of them are lazy other corrupt, some both and the rest are Priests“Hang on a second… the Spanish banks haven´t tried this yet because they are, in turn, stupid and lack the innovative energy to put forward new products or the intelligence to monitor the process.”
See above comments.
“british consumers, being much more intelligent,”
No, if they were they would not have been fleeced in Spain.“can take full advantage of offset mortgages and British banks being far more efficient and innovative than their Spanish counterparts can offer offset mortgages knowing that their clever customers will appreciate them”
I don’t know anybody, who has offset mortgage, for reasons stated above. At the height of the boom, there were 7000+ mortgage providers & 100’s of product to suit people circumstances, unlike Spain where it straight repayment. Some banks/Caja’s do interest only and that is for the two years or so. I have nothing against it, if this is their policy but than they cannot be construed as innovative.
“Funny how many “smart” english banks are having to be being bailed out by the british taxpayer”
British Banks are being bailed out very largely by being directly in business bed with USA, apart from their involvement in non core banking products .
“stupid” Santander had to buy out british banks. “
Santander has been a very conservative banks, they have taken hits in Latin America. If you don’t take risk you don’t grow. Botin family is in banking for generations and for your info I have a lot of regards for him & the daughter.
“Funny also how “stupid” building company Ferrovial is being forced by the British government to sell their one of their London airports”
Yes, because the management has been ineffective, last couple of year very high profile senior management had left the company, due to the CEO, the fiasco at terminal five, the over crowding at airports, the report sugguested that Ferroivial, had been exploiting its monoply.Let me also tell you that Ferrovial/Aggroman had the contract to build Warsaw airport, they were so far behind that the Warsaw authorities had to terminate their contract & gave to a German company to finish it off.
“But of course, Spaniards are lazy and ineffectual, their companies thrive in confusion and their system is corrupt how could they hope to compete in an open and unregulated marketplace such as the (ahem) British market “
Market competition is not only British, it can be German, French, Brazilian, Indian etc. The management skills of Spanish companies are an example of Fadesa, Telefonica, Endesa, Ferrovial are a few I can quote without going back to far to insult your youth.
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Shakeel have you had a look at
http://www.ausbanc.com -
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Hi again Katy. I have at random translated some of the articles. In my opinion they covers the issues that we all have been posting about.
Having, many very close Spanish friends in Spain. I fully understands how proud they are and rightly so. Any criticism to bring things to light/surface should not be treated as some form of Nationalistic disgraces. It should be welcomed & seen as a view from outside i.e. a different slant.
I am aware of the recent Spanish political, economical, structural turmoil/ evaluation and the progress that has been made to date. The issues of today or the ones to come our wayin future, has to be acted upon in good time in a coordinated manner at all levels. This is not some school kids playground spat.
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@shakeel wrote:
Before, I go any further Xabi, at least I am not comparing English against & Spanish, which ne is good or which bad. I am stating facts on the ground & in this instance facts in Spain.
mmmhh fair enough, i should not resort to “ad hominem” attacks to defend my points, or in this case “ad nationem”.
@shakeel wrote:
Its not a question of simple calculation of interest rates. There is the compounding effect, cash paid in for which you should get immediate value as appose to cheques, which needs to be cleared and this take time. Not every customer in any country will sit down and calculate on a daily, weekly, monthly basis of their debit/credit entries that affects their interest calculations and here comes the confidence & perception. Even Spanish people will tell you that their banks are theives.
yes, but you normally calculate the offset against a deposit, not a checking or current account. And the interets does not have to be calculated at every second, it can be calculated at the end of each day… or even at the end of each month based on the average balance. If other banks are doing it, it must be possible.
Anyway, my question was “does anybody know of any bank offering offset mortgage in Spain?” Your answer is “no”. Good.
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Just a quick point on the intial post
Banco Santander are offering Euribor +0.25% and if you have had your mortgage for more than six years they will transfer everything free of charge – including notaries fees. Maybe worth taking a look because a 2% differential on a 200,000 mortgage would save you about €4,000 a year and if there are no costs involved – just time – then I would say it may help you out.
Good luck
Vince
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Hi Inez
I am not sure to be honest. I went to see them about changing my account over from Banco Popular and they offered me this to change my mortgage over. I am resident here so I couldnt say if it applies to non residents – cant harm to ask though. I didnt take them up on the offer
One other point, someone mentioned about insurance. I had a remortgage last year and had to take out not only life insurance but insurance against being unemployed – and boy am I glad I did (this was with Banco Popular). I was made unemployed in December and since February have had my mortgage paid – which is just as well otherwise I would be going through the process of repossession.
From both my point of view and the banks this is €900 well spent and lasts for three years,
Best wishes
Vince
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I have just had my new mortgage rate and it works out at 2.65%,I pay 1.25% above that rate making it approx 3.9%,looking at the monthly euribor rates which my rates are based on I think my rate should be less than the 2.65%,can anyone confirm this as the January rate on this (http://www.irph.es/)website is 2.622% but we are now in April .
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Having just had an offer accepted, I am now shopping around for mortgages.
Caja Duero offers a mortgage for “young people” (under 40s) at Euribor plus 0.50 (may be as low as Euribor + 0.25 for customers willing to buy more products from the bank)
info: https://www.cajaduero.es/particulares/prestamos/hipotecas/hipoteca-joven.asp
Deutche bank is offering quite good as well, they call it “hipoteca rompedora” at Euribor + 0.27
Hope this helps
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@shakeel wrote:
There is a difference between offering & actually dispersing the mortgage
Shakeel, only yesterday I got an offer in writing for the Euribor + 0.25 mortgage with Cajaduero. I am now waiting for them to have the valuation done (tasacion) and then hopefully be signing the “compraventa” within two or three weeks.
This is what I got in order to meet their requirements.
– Term: 30 years, you must be under 40 to get this.
– Amount: 70% of the resale value of the property (assumming the valuation will be aligned with the resale value this will be well within the margin of the max. 80% they require)
– Monthly instalment: tops 30% of family income (calculated as of Euribor 3%)
– I have to “marry” the bank (i.e. have my salary paid into their account, have at least one credit card from them and spend no less than 1000 euros per year with it, sign an insurance and a payment protection plan)So yes, plenty of conditions, but I have done the maths and they add up for me.
Anyway, Wish me luck.
Rgds
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@El anciano wrote:
The Deutsche bank mortgage has similar conditions, but still looks like a good deal to me My bank manager told me that there is no “collar” on this mortgage, so the low rates at the moment should pay off. At least until, we see a flip in the economy, and rampant inflation kicks in 🙂
The Deutsche Bank mortgage is indeed very similar yes.
If we do see, as you suggest, a flip in the economy and rampan inflation becomes the trend then it is better to own a house than to own cash, isn´t it?
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I have been thinking about this a lot lately, it seems to me that the downside of rampant inflation would be that interest rates would rise, and wages wouldn’t keep up (at least in the short term). However, the real value of you debt on the mortgage falls too, so overall I think you are right. Best to own property, but the thought of high interest rates scares me a little 🙂
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@El anciano wrote:
I have been thinking about this a lot lately, it seems to me that the downside of rampant inflation would be that interest rates would rise, and wages wouldn’t keep up (at least in the short term). However, the real value of you debt on the mortgage falls too, so overall I think you are right. Best to own property, but the thought of high interest rates scares me a little 🙂
Yes this is why I have *finally* decided to buy, I have spent a long and happy time renting but now it seems like the combination of distressed sellers and low interest rates makes buying more appealing.
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