If you are thinking of applying for a mortgage loan and you are about to enter the comparator to verify the options you have, you must first know what types of credits exist, so you will know which one you need.
Mortgage loans can be differentiated by the type of rate applied to them
- Fixed rate: The fees to be paid for the mortgage loan will be the same from the beginning to the end. You can make pre-payments either by decreasing the amount to be paid and maintaining the term or by maintaining the amount and decreasing the term.
- Variable rate: You start paying less and then your fees will be updated semiannually or annually. The variation will depend on the Active Bank Rate (TAB) and prior coordination with the bank.
- Mixed rate: Starts as a fixed rate, generally for a period of 5 years, then becomes a variable rate and adjusts to market values.
When does each one suit?
The fixed rate is convenient if you know that the income you have will be the same for the next few years, that is, you do not expect any increase or decrease. It’s going to be safe, even though these rates may be a little higher.
In the variable rate there is a greater risk, as it may increase or decrease, depending on market values. That is precisely why the rates are usually a bit lower. If you have an emergency fund that allows you to face this possible increase or you know that your income will increase shortly, it is worth betting on them. The rate is calculated from time to time.
The mixed rate, as its name says, will mix both options, so if you expect an increase but that will not be shortly, you can opt for the mixed option: Start paying the fixed rate and then move to a variable.
The type of credit depends on the current situation and the near future of your income, so choose carefully. And above all, check your options! It is the only way to make a good decision. As always, the mortgage loan comparator is the easiest tool.