What do mortgage loans depend on?

In search of a profitable mortgage proposal, you have repeatedly come across different interest rates on the loan in different banks. What affects the bid, making it higher or lower?

Mortgage is a credit product that you get from the bank secured. The pledge in this case will be the real estate that you acquire. Until then, until you fully fulfill credit obligations, you will have a number of restrictions on ownership, for example, you will not be able to sell or give such real estate. And in the event that for any reason you will stop paying the loan, your real estate can be seized and implemented by the bank at the expense of debt repayment.

The interest rate can be called the amount that the bank receives in the percentage ratio from the total loan amount. For example, if you take an apartment in a mortgage worth 2 million rubles for 5 years (or 60 months) at a 13.5% credit rate, then the loan overpayment will be 761 182 rubles, due to the expiration of the entire mortgage period, you will pay the Bank 2 761 182 rubles. As you see from the interest rate directly depends on the final amount of debt, which you will need to give.

This type of bets is most often found. The rate of the rate remains unchanged or fixed throughout the entire time of the mortgage loan. If the initial loan is issued under 12.5% per annum, then this percentage will remain until the end of the debt payment.

With this type of bet, the Bank prescribes one of two types of payment: Annuituate, which implies the introduction of the same amount to the account until the end of the loan repayment period, or differentiated, which in turn implies a decrease in the monthly payment with each month, so the latest payments There will be less than those who were at the beginning of the loan. As a rule, such a scheme is rarely used in a mortgage loan.

Floating interest rates are very complex for predicting for a long time, since emerging from the name — they are not constant or not fixed. Often, when issuing a loan, floating rates look tempting, due to its lower size, but over time they can grow due to the factors affecting it. Since this type of bets with a certain periodicity is revised due to changes in the credit market, the borrower may not be ready for this, so more and more people choose the first type of bets, namely fixed.

Combined interest rates are the ability to combine the first two types of rates. Risks are the same as when floating. Complexity in forecasting, as a rule, does not go in favor of choosing this type of bets.

So, sobering with the concept of «interest rates», let’s learn from what their size depends.

As we know, the mortgage loan is more often drawn up with an initial contribution. Basically, banks are asked to make 10-15% of the total loan. For example, the cost of your real estate is 3 million rubles, which means your initial fee should be at least 300 — 450 thousand rubles. But, the more the amount of your initial contribution, the lower interest rate may be below. Also, an important point is the fact that, the more the initial contribution, the less you will have to the bank, and therefore the overpayment will be less.

Here, we face a choice between primary or secondary real estate. Primary real estate is new buildings. Basically, the interest rate will be less for new apartments. First, not all new houses are already built and handed over, and secondly, you get an apartment without decoration. Naked walls as they say. The minimum interest rate on primary real estate is 5.82%.

Secondary real estate — already built houses owned. Here interest rates will be higher, as the real estate you get ready. The interest rate begins from 8.01%.

If a potential borrower has a high credit rating, and never allowed overdue payments — it has chances to get more favorable conditions. Also, in the presence of a guarantor or the coacher on a mortgage loan — it is possible to get a lower interest rate.

On average mortgage is granted for up to 30 years. The long-term mortgage is more profitable for a potential borrower, because in this case the lender offers a lower interest rate, and issuing a mortgage for a short time accordingly increases the bet for several units. Thus, the Bank compensates for potential losses if you paid a loan, for example, 20 years, instead of the selected 5.

In the case of a long-term mortgage, the overpayment amount will be more, but it is worth remembering your right to early repayment by making large amounts of the monthly payment or the remaining loan amount.

Real estate insurance is a legitimate obligatory requirement when making a mortgage and does not affect the interest rate. But the rejection of life and health insurance, which is not a prerequisite for mortgage loan, can lead to an increase in your interest rate from 1 to 4% in different banks. To make a choice between a mortgage with insurance and a smaller percentage and mortgage without insurance, but, accordingly, with a great percentage, you can independently use credit calculators on the bank’s websites.

Thus, on the basis of the foregoing, it can be concluded that the preliminary study of all aspects affecting interest rates can significantly save your money and facilitate your mortgage loan before it is closed.

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