Historically low rates on mortgages have sharpened the duel of banks in attracting new clients. Despite mortgages, each bank wants to cut as much as possible from the market. Which of them offer the lowest rates on mortgages? Where can you save the most?
Overview of interest rates on mortgages
Mortgage interest is not everything. Nevertheless, they are looking at him as the first parameter when comparing people. That’s why I decided to focus on interest rates.
Mortgage conditions and interest rates are constantly changing over time. It also changes what I say in this article. It is advisable to always have an up-to-date overview of mortgages from all banks.
This is the current offer of most banks on the Slovak market (as of May 12, 2017):
- ČSOB is doing its best to keep its market share. She had to offer her mortgages to other market players. It currently offers 1.4% pa for 3 and 5 years. It addresses clients not only by low rates, but also by the possibility of making extraordinary payments beyond what banks have to allow the client by law.
- Mbank is almost a shame to remember. They offer high rates for all fixations today. The lowest rate eg for fixation for 3 years is 1.79% pa and only for LTV up to 50%. With LTVs over 80%, interest is as high as 2.09% pa.
- Oberbank is a less known bank. I do not usually meet her in practice. Their current offer on mortgages is interest from 1.35% pa to 3 years and from 1.39% pa to 5 years. It’s not a bank for everyone. Not everyone has the chance to get such interest in Oberbank.
- OTP Bank strives to build a larger market share by offering low interest rates to everyone following the Prima Bank model. It currently provides 1.2% pa interest for 3 and 5 year fixation.
- With its policy, Prima Bank has been attracting clients with low rates for long periods of time, and through refinancing mortgages, collecting clients from low-market markets. It currently offers 1.2% pa interest rate for 4 years.
- SLSP officially offers rates of 1.49% pa for 3-year fixation and 1.59% pa for 5 -year fixation. Only clients with the best creditworthiness and often only an exception will be offered. They are by no means the lowest rates on the market, but SLSP, on the other hand, pays the expert’s opinion and fee on the register for the deposit of the pledge. From 1.5. SLSP came with an interest rate of 1.29% pa for 1 and 3 years, where the client pays himself an expert opinion as well as a fee on the register.
- Tatra banka has never been a pioneer in providing the lowest rates on the market. Rather, it is a way to get clients through premium services. With the current offer of 1.45% pa for 3 years fixation and 1.55% pa for 5 years fixation in combination with a no-charge account (for mortgage over € 20,000), they can also compete with other banks. Clients with the highest creditworthiness can get an exception even lower than the interest.
- Unicredit has extremely low interest in ads. In fact, they are only for those clients who set up a credit insurance through the bank to make the mortgage much more expensive. Unicredit is currently offering 1.39% pa for 3 years and 1.59% pa for 5 years without a credit card. This interest is up to 80% LTV.
- VUB offers 1.39% pa for 3 and 4 years fixation and 1.49% pa for 5 years fixation. This interest will be received by every client except for clients with the worst creditworthiness. For LTV over 90%, VUB Bank applies a surcharge of 0.5% pa
Banks have begun to reimburse early mortgage fees
At the moment, banks are overtaking one in front of another to gain more clients. This is true not only for new mortgages, but also for refinancing mortgages where the fight has sharply increased.
It’s hard to believe that it pays off to the banks, but it really is. The first banks in the market have begun to reimburse the cost of a premature repayment fee outside the fixation anniversary.
Whether it is correct or not, I will not comment on that. What is important is that it can be a redemption for a group of people who have a high interest rate on older mortgages and have no possibility to reduce it without charge.
This group of people is not worth waiting for the anniversary of fixation. It is worthwhile leaving the bank right away, but only if they do not have to pay for the early repayment of the old mortgage or a new bank will pay for it.
Which banks reimburse early repayment fees?
VUB reimburses the fee for early repayment of the mortgage at Tatra banka, Sberbank and Prima banka up to € 1,500. This campaign lasts until 31.7.2017. VUB communicates it completely openly. She probably wants to get back clients who left them in the past.
ČSOB does not communicate this as a repayment of the prepayment fee. It will only give you the first mortgage payment up to 500 €, but only for mortgages up to 80% LTV. With lower mortgages and a shorter repayment period, this may be enough to “refund” the prepayment fee paid.
Tatra banka has lost all barriers. If you refinance to Tatra bank from any other bank, you will be reimbursed for the entire premature repayment fee in the old bank. This campaign is set up until 30.8.2017.
Which parameters are worth comparing when choosing a mortgage
- Monthly payment – Its amount depends mainly on the interest rate. The lower the rate, the lower the monthly payment. It does not just fit SLSP, where the installment at the same interest is always slightly higher than in another bank. They use a different calculation. They have more days to calculate than other banks.
- Account Management Fee – Some are free of charge, some with a fee of € 5 to € 10, and some can be set to return the fee and you are at zero.
- In Tatrabank you only have a mortgage over € 20,000, in Unicredite you have a 100% discount for 10 years automatically, if you go there at least € 400 a month, in VUB, SLSP and CSOB you have to meet different conditions and get 100% discount and I can go on. Every bank has something different and it is constantly changing. Some things are just marketing catches and some are easy to meet for someone.
- Mortgage approval fee – Normally it is 0.8% of the mortgage amount, some banks even have more. Currently, several banks have 100% discount on mortgage approval fees. With refinancing mortgages you almost never pay this fee.
- Conditions for obtaining an interest rate – Here are different marketing pullers. The most famous of these are Unicredit, where people are attracted to interest of 0.99%, but you have to take a credit card and use it, which could still be survived, but also insurance for 5 years worth 3% of the loan amount. Other banks sometimes try similar tricks. Few who really pay off. In most cases, banks require active use of a current account in combination with the use of some other service of that bank.
- What costs will be paid by the bank – eg SLSP will still reimburse the expert opinion and fee on the pledge contracts, VUB and Tatra bank will pay the fee for early repayment of the mortgage in the old bank, if you refinance the Mortgage, CSOB will refund you the first installment and so on. It still changes and you always find a bank that offers something extra.
- Availability of ATMs – This seems to be an insignificant thing, but it does not have to look that way in practice. Try to ask clients of some banks how much they cost monthly withdrawals from foreign ATMs or how much they get when they want to withdraw their money.
You will not find a bank on the market that has the best conditions for everyone. Each bank has its pluses and minuses and it changes over time. However, it is always a good idea to see other parameters that make your mortgage more expensive or cheaper, in addition to the rate.
When choosing a mortgage, I recommend developing an overview of mortgages from all banks, where you will compare all relevant parameters. On this basis, you can choose the mortgage where you pay the least.
Banks can be handled by you if you have enough time and time to reach your broker. The most important thing is to get a mortgage that suits you best.