The forecast that negative interest rates will lengthen over the next decade is once again shaking up the mortgage market. EVO Banco, the digital subsidiary of the Bankinter group, announced this Tuesday that it will reduce the cost of its fixed-rate mortgages to 1.67% APR, including connections, for a period of up to 30 years.
It is the cheapest reference on the market in this category and revolutionizes the mortgage war in the sector to capture the low demand for credit that has survived the coronavirus crisis.
The bank accelerates competition in the sector by taking advantage of a cheaper cost structure, since it has a digital structure and this avoids the network and personnel costs that the large players in the sector have to bear.
The offer includes an APR of 1.87% (TIN 1.49%) for clients who are not linked, which can be reduced by two tenths for those who have a payroll of more than 600 euros and take out home insurance. It can be contracted through the internet in a process that, according to the bank, does not last more than 20 minutes.
“After the price update, EVO remains among the top three positions in the mortgage ranking in the four modalities it sells: variable rate (1.06% APR without bonuses and 0.76% APR with bonuses), mixed rate at 10 years ± os (1.67% APR without bonuses and 1.19% APR with bonuses), 20-year mixed rate (1.87% APR without bonuses and 1.67% with bonuses), and fixed rate from 20 to 30 years (1.87% APR without bonuses and 1.67% APR with bonuses) “, it highlights in a statement.
Negative interest rates, with the Euribor at -0.47 points, have motivated a comprehensive change in the mortgage market with the proliferation of fixed rate financing offers and the reduction of variables. Today, almost 70% of the loans to acquire a home that are signed in Spain are at a fixed rate, when four years ago they were barely 10%.
EVO Banco’s offer opens a gap of more than one point with the average interest rate at which fixed mortgages are marketed in Spain, which according to the INE stands at 2.86%. This figure is, however, much lower than the 4.06% charged in January 2016, the first time that the Euribor entered negative territory.
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