When completing a mortgage, you need to be confused with the possibility of outside the mortgage

When choosing a mortgage, sometimes for years the rate of the furnace remains. Banks cannot afford large deviations from the competition and the differences in the hundredth of a percentage point will not affect the installments. During the fulfillment of the bag, the rates may increase so much that the long run can get into trouble.

Mortgage loans are most often fulfilled by annuity, ie by a constant payment. It always changes the rate that occurs during the refixation period. (You can also choose the opposite option, where it remains unchanged in installments and the new rates are adjusted to the length of the maturity period. )

Differences in the age of the rate in the hundredth of the installment affect only slightly

A large number of applicants for a mortgage, when choosing it, decide primarily on the basis of the rate offered to them. Therefore, banks use rates as one of the main tools by which they can differentiate their money from the product of the competition. Therefore, especially in the period when the mortgage rates on the market have been declining for years and have approached the minimum below which it cannot be measured, banks will be ahead, which will offer the lowest.

Two years ago, when years of mortgage rates reached their historic low, clients were able to negotiate a mortgage with ron fixac with a rate below 3%. If a bank offered to rate the rate by a hundredth, or a tenth of a percentage point, it emphasized it as a big competitive advantage. At the same time, even with an above-average two million mortgages with a twenty-year maturity, the difference in the installment rate at the rates of 2.99% and 2.89% is only one hundred crowns. The differences in the hundredths are then completely negligible. In the case of the mortgage, only ten crowns are paid at rates of 2.99% and 2.98%.

For the rates that we encounter in the market today, it pays so. The difference in the installment for two million mortgages with a twenty-year maturity in the rates of 5.0% and 4.9% is only 110 crowns.

When completing a mortgage, you need to be confused with the possibility of outside the mortgage

years of mortgage rates offered at one time by individual banks, due to the competitive struggle from each other It pays at least about the minimum rates that banks officially publish. Changes in annual rates over time to meet the long term can have a significant effect.

This has been evidenced by the development of annual rates over the last few years. This can be seen in the chart of the FINCENTRUM HYPOINDEX chart, which shows the average year of the rates of newly negotiated mortgages since January 2003. At that time it reached 5.73%, in the following months the rates with both currency and five fluctuations decreased. They reached their bottom in the summer of 2005, specifically in July, when the value of HYPOINDEX was 3.62%. Sweat has reversed the trend and for years mortgage rates, again with both currency and two fluctuations, are rising.

See graph

The following table is a few examples that show how changes in the year of a mortgage affect its installments. This is a volume of 1,760,000 crowns, which is currently average in the newly agreed mortgages. The maturity period is twenty years, the HYPOINDEX values ​​are used as the rate years.

If the debtor negotiated a mortgage with these parameters in January 2003, the bank’s salary by two thousand crowns more than the one who negotiated it in the last years of rates in the year 2005. necessary period of two and a half years. Due to the very fast increase in mortgage rates during the last months, the difference between the agreements agreed during this year is also clear. The minimum from the current and the current maximum from August means a difference of 695 crowns for your installments.

Dependence in mortgage payments on vi years rates
Mortgage 1,760,000 K, maturity 20 years, rate years: FINCENTRUM HYPOINDEX
obdobyears ratein spltky (K)difference in vi spltky (K)

January 2003 and August 2007:

max – January 20035,73 %12 3372021
min – ervenec 20053,62 %10 316

year 2007 (last date from August):

max – August 20074,93 %11 547695
min – bezen 20074,20 %10 852

Source: Fincentrum.cz

For the period given, the difference between the minimum of 3.62% and the maximum of 5.73% is only 2.11 percentage points. Bags were once provided at much higher rates in excess of 10%. For example, at 12% years of rates, the mortgage payment with the stated parameters would reach 19,379 crowns. If such a thing happened to him, many long periods of time after refixation could have problems with fulfillment. At present, you do not have to worry about this, before signing the level of the contract, the future long-term should consider whether it will be able to meet the mortgage even if the rate is outside the years. This should be taken into account even when choosing a long fixation time.

You need to be careful, especially at very low years of rates with a short fixation

Especially in periods when the rates are very low and the shortest fixation is very tempting (as was the case in mid-2005), mortgage applicants must take into account the weight that such a suitable rate is likely to increase after the end of the fixed period. How such a low installment changes for me is shown by the following example of the development of five years and five years of rates for the last two years. The table shows the average average rate and a mortgage of 1,760,000 crowns with a twenty-year maturity.

Not only in years has the rate with ron fixation fallen in the last two years and below three percent, now it reaches 4.69%. In the first case, the debtor fulfilled by 1581 crowns less than not the one who will negotiate a mortgage with ron fixation at present. There is a difference of nco men in ptiletch rates.

Dependence in the mortgage payment on the five-year rate – ron and five-year fixation in the last two years
Mortgage 1,760,000 K, maturity 20 years, rate years: FINCENTRUM HYPOINDEX
obdobyears ratein spltky (K)difference in vi spltky (K)

fixation years rate one year

max – August 20074,69 %11 3161581
min – August 20052,97 %9735

fixation years rate pt years

max – August 20075,17 %11 7811041
min – August 20054,08 %10 740

Source: Fincentrum.cz