A mortgage is one of the largest financial commitments that you can incur. A loan for a house or flat is an investment for many years, so you should think carefully about what offer we will choose.
The modern banking market is full of mortgage loan offers. Almost every bank operating in the country offers this product, and the demand for this type of liabilities has been the highest for years.
Interest is not everything
The increase in interest in mortgage loans is due to the relatively low interest rates that have been on the banks’ offer for several months. All this thanks to the favorable level of current reference rates.
However, interest rate alone, in contrast to widely disseminated information, is not an indicator of the attractiveness of a loan. The total cost of our commitment will include many other fees.
What most accurately reflects the current cost of the mortgage is the APRC, ie the Actual Annual Interest Rate. This ratio expresses the percentage of the annual total cost of the loan to the originally borrowed money.
The total cost of the loan
Looking for the cheapest and the best mortgage on the market, it is worth going to several banks and asking for the preparation of an initial loan proposal. Remember, however, that no bank will accept your application unless you have good credit standing and make no own contribution.
Mortgage loan offers calculated by individual banks will show the total cost of the loan. Its size consists not only of interest, but also commission, account maintenance costs, loan repayment insurance or compulsory cross-selling services.
In the case of loans denominated in foreign currencies, the additional fee included in the total cost of the loan will be the income tax on the loan.
In the case of mortgage loans, it is worth remembering a few additional fees that we will have to pay. This is, among others the cost of bridging insurance with which the bank will secure the loan in the period between the payment of the borrower’s funds and the entry of the mortgage in the land and mortgage register.
Low own contribution insurance can also be added – if you can’t invest enough cash or other goods for investment.
In the case of a mortgage, the banks will also add a fee for the estimation or full expert valuation of the property. You will also be required to pay a tax fee on civil law transactions.