Is it possible to improve housing credit conditions in Covid-19 times?
This may be a good time for customers to try to make the terms of the loan taken before the pandemic more advantageous.
Most consumers have taken out home loans for more than 25-30 years. This is a very long term - and that represents a lot of money in interest - so it justifies periodically reviewing whether there is a possibility to improve the conditions initially obtained, when signing the home purchase loan.
Each case has its particularities, but it is certain that the current moment of crisis caused by the Covid-19 pandemic can be very opportune to try to improve the conditions of housing loans. The scenario is very favorable with regard to interest rates, since they are very competitive and banks are looking to better adjust their offers compared to what happened in the past.
However, it is important to take into account several issues, depending on the type of funding the person has:
- Variable Rate Housing Credit: Euribor is at historically low levels, but this applies to all banks. In this way, what has to be checked is the spread, as it is what banks can modify;
- Fixed Rate Housing Credit: here the comparison is made on the applied rate, but it is very important to know the possible penalty for early cancellation, applicable to this type of loans.
In all cases, the quickest solution is to negotiate with the bank itself to improve conditions: in general they tend to be receptive, even if this does not guarantee that they will present the best prices. Comparing is always the best way to decide.
Another option is to change the type of interest rate, from fixed to variable or vice versa: the fixed rate is suitable for those looking for peace of mind, taking advantage of the very low levels of rates on current housing loans; the variable rate, on the other hand, is for those who want to reduce the monthly installment in the short term and know that they can cancel the loan in advance, or assume the increase in installments should they happen due to fluctuations in Euribor.
Source: idealista.pt
14 from April from 2020
Catarina MirandaAdministrative Assistent
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