ADVANTAGES AND DISADVANTAGES OF FIXED AND VARIABLE MORTGAGES

The rise in interest rates may affect those who have variable mortgages.

However, it is important to evaluate the advantages and disadvantages that can be found when considering choosing between variable and fixed mortgages.

FIXED MORTGAGE

When a fixed mortgage is signed, this means that the interest rate will be the same throughout the life of the loan and that the same installment will be paid throughout that time, regardless of the amount that corresponds to amortization or interests.

VARIABLE MORTGAGE

The variable mortgage is the most common because the interests change over time, coinciding with the periodic reviews that each user has agreed with their bank on their loan.

In recent years, interest rates have been decreasing, making this type of mortgage more attractive.

However, in the last period, interest rates have begun to rise at an alarming rate, which makes this type of mortgages no longer interesting and fixed-rate mortgages are safer.

ADVANTAGES OF CHANGING FROM VARIABLE TO FIXED

This situation is when you consider whether it is worth going from a mortgage mortgage.

An important point is that a more stable situation will be achieved by knowing that the increase in the interest rate will not affect our mortgage.

This will positively influence the family economy since the fee will be the same until the end.

DISADVANTAGES OF CHANGE FROM VARIBLE TO FIXED

Depending on the entity where you have the loan, it will entail some modifications that may be subrogated to a new mortgage or canceling the existing one and making a new one.

Either option means paying expenses derived from these changes.

It may also be the case that a higher installment is initially paid since to calculate the installment throughout the life of the loan it is calculated on average values calculated by the bank.

Another drawback is that there is no possibility of profiting in the event that interest rates drop again.

NEGOTIATION

At the point where one considers the possibility of changing the mortgage from variable to fixed, it is a good time to, before deciding, negotiate with different banking entities.

First talk to the bank with which you have the mortgage to see what options it can offer in this regard and then with other entities, and depending on what is most advantageous, finally decide. entities,  and depending on what is most advantageous, finally decide.