Rates

You can contact directly a bank but your chance to get a mortgage are clearly reduced first and the chances to get good conditions are reduced to zero. We work with several banks and we know all mortgage conditions. These conditions, rate, penalties, holiday period….change every month according to bank policy. We know that some banks will refuse self employed when some will accept, some bank do not have fixed rate and some are specialist (retail bank)….and in addition we have better conditions as we finance a lot of clients: we have agreement on bank fees, we have special interest rate approx 0.4% below what you can do with a direct application.

For the moment it is better to opt for a fixed rate

If you go for a variable rate with a teaser (discounted) rate valid for a short period your saving compared with a fixed rate will be minimum but after one year your interest rate will be based on a Euribor which is quite high. Your monthly repayments will increase a lot or the duration of the mortgage.

For a mortgage of 150 000 € with a discounted variable rate of 4,35 % on 15 years for example, monthly repayments will start from 1 136 € ; then when the rate will be indexed on the Euribor 3 months your interest rate will be 6% approx and the monthly repayments will reach 1 294 €, so 158 € increase per month ! So for the moment a fixed rate is better option.

Yes ! It is the moment to convert your variable rate into a fixed rate mortgage. In 2006 your interest rate based on a Euribor reached at least 6%. During the same period long term interests increased by 1.2 when short term rates increased by 2%. By converting your variable rate into a fixed rate you are securing your monthly repayments for the future. Today a fixed rate on 20 years will be approx 5% when a variable rate is 6%.

You are looking for :

• security of your monthly budget : go for a fixed rate which are still very low.
• low monthly repayments during the first year : go for a variable rate but ask for a cap in order to prevent any high increase of your monthly repayment.