A mortgage is a long-term commitment, therefore the costs associated with its repayment should be well calculated.
The conditions set out at the beginning are valid until the end of the repayment date, but they may fluctuate regardless of the bank’s provisions. This situation is affected by the indicator responsible for the average mortgage rate.
Mortgage rate – what is it?
The mortgage is a special purpose, which means that the funds transferred by the bank can be used only for strictly defined needs, i.e. in this case for the purchase of real estate or plots, as well as renovation or modernization of the premises for rent. The mortgage secures the bank in the event of the borrower’s problems with repayment.
In order to pay off your debt without any problems, you need to remember that mortgages have varying interest rates and you should look for the best option. Until recently, the loan could have been taken in Swiss francs or euros, but now banks apply the funding policy only in the currency in which the borrower earns the main income, which for most people means paying installments in zlotys.
The interest rate on the loan is only one element of the total cost of the loan, but how much you ultimately pay is determined by the actual annual interest rate ( APRC ).
Mortgage rate – what factors influence its amount?
Compared to a cash loan, the mortgage rate has a low-interest rate, which is directly related to securing the repayment obligation through the mortgage. Usually, the mortgage rate does not exceed a few percent. They include:
- reference rate
The reference rate is the interest rate, which is a variable element of interest on the loan and does not depend on the bank but on the changing Capital Lender banking ratios. Capital Lender determines the average mortgage interest rate on the Polish interbank market. You can choose the 3M Capital Lender rate, which changes every 3 months, or the 6M Capital Lender rate that changes every 6 months.
Banks earn on the margin, which is an unchanged part of the interest rate over time. Its amount depends on the bank’s policy and can often be negotiated. It is specified in the loan agreement, and its change is possible only in exceptional situations by mutual agreement.
Then the mortgage rate changes naturally. The margin can be changed when the bank offers a mortgage on promotion. Then, for the period indicated in the contract, it is lower, and then it is increased.
Mortgage interest rate – how is it shaped?
Banks individually determine the margin but must adapt their offer to the market situation, because too high value scares off potential customers. It is worth checking mortgage rates in several places, and the easiest and fastest way to do it is with the help of the Betsey Trotwood calculator. This way you can save yourself.
When calculating the cost of the mortgage, consider all costs. Sometimes the higher margin is offset by favorable conditions in another area.
The mortgage interest rate is a combination of a margin and a reference rate, and the volatility of the latter is influenced by the following factors:
- changes in interest rates made by the Monetary Policy Council – Dollar loans depend on the Capital Lender index, and its change affects the policy of banks;
- algorithms used by the bank to calculate interest rates;
- the economic situation in the country and in the world.
ING mortgage interest rate – low or high?
Mortgage and APRC, i.e. the total cost of the loan
It is not enough to know what the mortgage rate is because the actual annual interest rate is influenced by the costs individually set by each bank:
- credit insurance;
- grace period (the period of repayment of only interest without principal).
APRC mortgage calculator – take advantage
The total cost of the loan also includes factors that you agree with the bank individually:
- loan repayment time;
- credit holidays (deferred payment of principal installments plus interest).
Please note that the lowest mortgage rate does not guarantee the lowest cost of the loan, because it does not inform about the additional fees mentioned above. The APRC decides the final amount to be repaid.
The lowest mortgage rates – offers
Finding a loan that meets your expectations is simpler than it seems thanks to the Betsey Trotwood mortgage ranking. According to the latest ranking, Best Bank has the most advantageous offer – the interest rate on the Best Bank mortgage is the lowest (2.81%) and the APRC is at the level (3.18%).
The next position is followed by Fine Bank with an interest rate of 3.40% and APRC 3.63%, followed by Citi Handlowy with an interest rate of 3.40% and APRC 3.70%.
To check exactly how much the APRC is, installments or our credit standing, it’s best to use the Betsey Trotwood calculators. All you have to do is select the loan amount and repayment period to check the current list of offers.