Two out of three banks lower their fixed mortgages saving customers 500 euros a year

Two out of three banks lower their fixed mortgages saving customers 500 euros a year

The average rate on house loans has dipped from 3.65% at the end of 2023 to 3.15% in April


Friday, 19 April 2024, 12:41


Last year, at the height of the ECB's (European Central Bank) interest rate hike, Spanish banks made their fixed mortgages considerably more expensive, with interest rates rising to over 4%. But the situation has turned around in 2024. According to a study by the financial products comparison site, two out of three banks offering fixed mortgages in Spain have made these products cheaper since the start of the year. Thanks to these reductions, the price of these loans has been reduced by almost 500 euros per year on average compared to what they cost in 2023.

HelpMyCash's comparison reveals that the interest rate on fixed mortgages on offer has fallen considerably so far this year. At the end of December 2023, their average rate was around 3.65%, while in April 2024 it stands at around 3.15%. In other words the average interest rate on fixed-rate mortgages is now 0.5 percentage points lower than at the end of last year. "Translated to an average mortgage loan of 150,000 euros to be repaid over 30 years, this represents a reduction of about 41 euros per month and almost 500 euros per year on average," explains Miquel Riera, mortgage analyst HelpMyCash.

This reduction has taken place in the context of a commercial war that banks started at the beginning of this year. "Since 2024 began, at least 14 banks have reduced the interest rate on their fixed-rate offers, which represents 66.67% (two out of three) of those that market this type of product in Spain," Riera points out.

The banks with the biggest reductions

The most significant reductions were made by Banco Sabadell (from 3.40% to 2.75%), CaixaBank (from 3.55% to 2.90%) and Unicaja (from 3.90% to 3.25%), all lowering their rates by 0.65 percentage points. Also noteworthy are the reductions by Imagin (from 3.70% to 3.10%) and ING (from 4.20% to 3.65%). It is worth remembering, however, that the vast majority of these entities require other products to be contracted in order to access these prices, such as buying their insurance products or opening (additional) accounts with them, so it is important to calculate to the real cost of what is being contracted.

This interest rates battle has started for two reasons, according to HelpMyCash experts: "Firstly, because banks need to incentivise the contracting of mortgage loans, which fell by almost 20% in 2023 due to the rise in the cost of these products. And secondly, because the banks are expecting that the European Central Bank will reduce interest rates from the middle of this year, which gives them room to offer cheaper fixed mortgages".

Time to negotiate

This website's analysts also claim that other banking institutions not appearing in the above list are nevertheless unofficially lowering the price of their fixed mortgages, but only if the applicant's solvency profile is good and the applicant pushes for a better offer. In certain circumstances, they claim, it is possible to get an interest rate of around 2.50%, or even lower.

For this reason, HelpMyCash advises those interested in taking out a fixed mortgage to ask for offers from several banks and to haggle with them to get the best possible deal.

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