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Mortgage hope
It seems there’s good news for mortgage hunters this year as banks once again begin to offer lower interest rate deals.

There is an upward trend in the availability of mortgage offers
There is an upward trend in the availability of mortgage offers

18.02.2014 - The beginning of 2014 has seen a change of tendency, with banks now offering products with lower differentials than have been seen for a while.

So much so that it is now possible to find up to 10 different mortgage packages with interests below Euribor plus 2.00 per cent.

For instance, Bankinter and Santander have both started the year with voracious campaigns to promote their new mortgages and the surprise offer of two of the packages with the lowest differentials in the market.

So, according to statistics, the average differential now sits at 2.49 per cent, something unthinkable for only a year ago.  

The fixed-rate market has also taken an interesting turn, with the appearance of a 20-year offer from Kutxabank, based in the Spanish peninsula, of only 3.89 per cent.  However, this is dependent on customers having their salary paid into the bank, taking out life and house insurance, contracting the bank’s credit and debit cards, and signing up for a Pension plan with the same entity.  Otherwise the rate rises to 5.24 per cent, though this is still significantly cheaper than the nearest competitor, La Caixa Bank, which currently stands at 6.2 per cent.  In fact, though this is one of the most stringent, the majority of the new, lower, offers all come with similar requirements.

Meanwhile, a further way to achieve a reduction in interest rates is to buy a property straight from the bank.  SabadellCAM has launched itself into the fray and, like many of its ilk, is now offering 100 per cent finance on any property on their own books, or a maximum of 80 per cent over 40 years for a property from another source.

Though this upturn has been seen as encouraging, there is nothing altruistic about the situation.  Banks have undoubtedly been lying in wait for what is deemed the correct moment to once again begin raising large amounts of revenue via a very traditional method.   

That hasn’t stopped politicians are glibly talking about the, “recuperation of credit facilities”, but these are really only isolated examples and it seems a little early to start crowing about everything returning to normal.  Especially as start up commissions are generally higher and the criteria for acceptance are still very strict, but at least banks are once again feeling confident enough to start actively offering credit facilities.

And of course, once one starts, the battle is on and this may mean a widening of the market over the coming months.  

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There is an upward trend in the availability of mortgage offers 
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