Fixed Rate Mortgage: How It Works, Calculation of Installment and Best Offers of Banks

The Fixed Rate Mortgage is a form of financing in which a sum of money is disbursed, for the purchase of a house, and the amount is then amortized, ie returned upon payment of constant installments throughout the period of duration. of the financing itself, usually for a period ranging from 10 to 30 years. To choose the most convenient Credit Institute on the market to finance the purchase of our dreamed house, it is essential to know the amount we are going to request.

The amount of the installment in the fixed rate loan is calculated based on the amount that is disbursed at the time of purchase and the duration of the Loan. If there are numerous credit institutions that finance amounts not exceeding 150,000.00 euros, many less are those that grant mortgages for amounts higher than this. Therefore the choice of Institutes that will be able to satisfy our requests and needs is also greatly reduced.

Examples of Fixed Rate Mortgages

Let’s take a direct and real example to understand the situation today. If we wanted to buy a property worth € 180,000.00 and ask for a Mortgage with a value of € 100,000.00 for a period of 25 years at a fixed rate, the best proposal would be made by Hello bank! of the Pft group, which offers us an installment of 419.00 euros per month with 200 euros of investigative costs and 300.00 of expertise. Also the APR (annual effective global rate) contained at 2.04%. Pft always follows Pft group with an installment of € 419.00, an investigation of € 800.00, an expert report of € 300.00 and an APR of 2.08%.

Things change if we request the same amount of mortgage but buy a property of more value. In this case the best offer would be received by Centibank. For example, if the value of the property was 220,000.00 euros instead of 180,000.00 euros the proposal would be an installment of 415.63 euros per month with a preliminary investigation of 1,200.00 euros and an appraisal of 280.00 euros (APR) : 2.18%).

Another variable that affects the interest rate of the Mortgage, and therefore on the determination of the fixed rate installment is if the loan request is made for the purchase of first or second home. In the first case of course there are special facilities and sometimes you can get a real mortgage at a subsidized rate. The best way to do your research and know which Bank currently offers the best market conditions is to compare the banks through the portals that are on the Internet, which by means of automatic systems allow us to enter the amount requested, the value of the property, and we calculate the installment, interest, the APR and the costs of investigation of 60 and more banks in comparison.

Fixed Rate Mortgage

This is certainly an excellent way to be informed about what the market offers and to start to get an idea of ​​the costs that we could have in applying for a fixed rate mortgage. But it is equally certain that if we have been a regular customer of the same bank for years, it is easy for us to get special treatment as our own consolidated customers.

Maybe we can first do a “do it yourself” search on the web to look for the best market conditions, print them and contact our Credit Institute and see together what offer they can make us as customers. Surely you will have favorable conditions so you can proceed to the realization of your dream.

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