Friday 30 May 2014

Interest on mortgage

The biggest impact on the total amount that you give to the bank, paying off a mortgage, no interest. For this reason, it is worth a closer look at the process of constructing its values ​​and other issues related to interest payments.

The interest rate on a mortgage loan offered by banks is twofold: fixed and variable. Most people are opting for a mortgage but chooses the latter option, or variable interest rates , so you should look at it closely and see what factors have an impact on its value. To start with WIBOR reference rate which is used for PLN loans and LIBOR and EURIBOR used for borrowing in foreign currencies . The values ​​of these rates are based on market rates, which from time to time change, affecting the interest rate on the mortgage . They are rigid number, independent of the bank and the person incurring the mortgage . In addition to the reference facility take into account also imposed their margins, which are the basis of their profit. It is known that the lower the value, the interest rate is attractive to the customer. Speaking of margins, it is worth remembering that may then negotiate and best to do it before the conclusion of the contract. Indeed, if you decide to sign a contract for a mortgage , negotiating margins in the later period will be doomed to failure. Thus, the sum of the rates is the result of two values ​​determined from above the reference rate and determined by each bank individually margins. Adding together these two factors, we get a mortgage interest rate underlying the calculation of the interest paid on your loan.

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