It is worth paying attention to which of the wide range of home loan facilities borrowers require, as with a $ 8 million loan, the difference between the cheapest and most expensive loans can be 6-8 thousand a month and 5 million in the long term. com compilation. According to TimelyBank experts, more and more people are interested in fixed-rate mortgages for longer periods, 5 or 10 years, as they are more predictable and, in the long run, put a smaller burden on the household cash with the expected increase in household income.
The demand for housing loans has also increased
The housing market has picked up in the past year and a half, and the demand for housing loans has also increased. According to TimelyBank, which belongs to the real estate group, 43% more people were interested in home loans this year. Demand for home loans may help in the coming period, with much lower interest rates and full credit rates than in previous years. However, it is worthwhile to look closely at the wide range as there may be significant differences in the monthly repayment installment and the amount repayable over the entire term. Peter Gergely, a loan expert at TimelyBank, belonging to the real estate group, put forward an example that when he applied for one of the cheapest 20-year home loan of 8 million forints in mid-April last month, his monthly installment was just over 49 thousand USD. while the most expensive home loans had the same amount of 55.6 thousand USD. That is, choosing a cheaper loan was more than $ 6,000 a month for almost a year, and more than $ 72,000 a month for a total of 12 months.
According to Penny George, assuming no change in the APR, a total of $ 11.8 million is to be paid over the last 20 years for the cheapest loan taken in April, and the other over $ 13 million, which is a difference of more than $ 1 million. . Penny George emphasized that this is a theoretical calculation, since credit burdens can be fundamentally influenced by changes in interest rates, which are fixed by banks for different periods. In his view, the focus has been on shorter-term floating rate loans of 3-12 months in recent years, but interest in longer-term fixed-term loans of 5 or 10 years is growing. This is because they are more predictable than 3-12 months variable-rate loans , but there can be major differences.
One of the cheapest 5-year, 8-million-dollar mortgages with a fixed interest rate
5 years was available at TimelyBank in the last week of May, according to a current rate of 5.3 percent, which means a repayment of nearly 54 thousand USD. The annual percentage rate of one of the most expensive schemes was 7.3 percent, which means a monthly expense of $ 62,000, and the repayment installment for both loans will not change for 5 years. “There are also differences in the interest rate fixed for 10 years, with the monthly repayment installment of one of the cheapest 8 million housing loans with a term of 20 years being more than 56 thousand forints and the most expensive one more than 63 thousand forints. million. Therefore, it is definitely worth comparing the offers of banks – even with online loan calculators – and not just going to our cheese bank, because they are not at all sure that they offer the cheapest loan and can lose millions, ”said Penny George.
Several factors are in favor of long-term fixed rate loans
“On the one hand, predictability and possible changes in interest rates do not affect the installment installment, on the other hand, borrowers’ net income is expected to increase over a number of years, while the installment installment remains fixed, making it easier to adjust the same installment over time. It is no coincidence that this year, the mortgage rules have been relaxed for mortgages with a fixed rate of at least 5 years, ”said Penny George. According to TimelyBank’s loan expert, demand for home loans may remain intense in the next period – in the second half of the year and next year – and competition between banks may intensify, partly due to interest rates.