Due to the ever-expanding mortgage lending market, there is a lot of competition in the market and so there are significant differences between offers. With a $ 7 million home loan taken over 15 years, there may be a difference of up to $ 3.5 million in repayment. While variable rate schemes are cheaper, those who want a predictable repayment should be able to apply for a fixed-term loan for several years, up to 5-15 years.
This year saw a turnaround in the home loan market
With new home loan agreements exceeding $ 300 billion in the first eight months of the year, an increase of 45% compared to the same period of the previous year. The increased interest is also shown by the fact that at BankRáció.hu, which deals with the comparison of bank offers, the number of people interested in home loans increased by 67 percent in the first eight months of the year. “The booming market forces banks to become more competitive, but it doesn’t matter which bank and exactly what kind of home loan applicants take out. The differences are significant, ”said Peter Gergely, a loan expert at BankRáció.hu.
For a $ 7 million 15-year loan, there may be a difference of up to $ 3.5 million in repayment. According to BankRáció.hu’s comparative analysis of the offers valid at the beginning of October, the best offer for this loan will have to be repaid in the amount of $ 8.6 million over 15 years, which means an initial monthly repayment of $ 48 thousand. The most expensive loan facility will have to be repaid in the amount of 12.1 million forints over 15 years, which is 66.3 thousand forints per month.
The interest period plays a key role
According to Jorge Gerly, however, it is very important that for the cheapest and most expensive loan in question, only the amount borrowed and the maturity are the same, but not only the difference between the banks but also the interest period plays a role. Although floating rate loans – 3, 6 or 12 months – are initially cheaper, if the interest rate changes, the monthly repayment may change. “Any increase in the base rate during the term of the loan may increase the installment,” he added. However, long-term loans with a fixed repayment term of 5 to 15 years can be applied for, with the same amount being payable each month over a given period. If the loan applicant wants a predictable, predictable repayment, then they are offered loans with a fixed installment for 5-15 years.
“At the same time, those who choose these are also worth a look at the offer, as for fixed-term loans of 5 to 15 years there is a significant difference of up to $ 2 million in the total repayable amount. Therefore, it is not only worth asking for a quote from your own bank, as another bank can offer better terms and conditions, and with the help of inquiries, you can save millions, ”he said.
Mortgage market may continue to boom in the coming period
With more and more borrowers opting for long-term, secure, fixed-term loans. One of the most important factors in the growth of the housing loan market may be the increase of the room for maneuver of households, especially their net real wages.