Houses for Sale in Torrevieja Spain
The new mortgage law of Spain will allow to change a variable mortgage for a fixed mortgage at a reduced price
According to has announced the Minister of Economy of the Spanish Government, Luis de Guindos, the regulation will allow to change a variable mortgage for a fixed one at a reduced price, as long as an agreement with the bank is reached.
Currently, although fixed rate mortgages account for 40% of the new loans that are formalized, 95% of the loans to buy a home in Spain are linked to a variable interest rate, consisting of a differential that applies the bank and the Euribor.
With this data on the table, the Minister of Economy stressed that mortgages are very long-term contracts, usually 25 or 30 years, so interest rates will not always be the same. In fact, a raise of rates is going to be reflected in the mortgages and for that reason it gives the possibility to pass them to fixed type.
De Guindos has indicated that the Government of Spain is going to give a very cheap option from the point of view of cost so that this change can take place, although the fixed rate would be concretized in a negotiation between the parties.
In addition to providing this channel with virtually no costs for the consumer to change the rate that regulates their mortgage payments, the Real Estate Credit Act will ensure that transparency is absolute in relation to all expenses and complex clauses.
The objective is to improve the conditions for the consumer at the time of an early repayment or to allow the exchange of a loan from a foreign currency to the euro without penalty.
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