It is almost impossible to compare all mortgage offers yourself. Nearly 20 banks offer a mortgage. Some have more than one offer, while others have additional promotions. Ready comparisons come in handy, but how do you read the mortgage rankings to choose the best deal?
The cheapest mortgage
If you have full creditworthiness, i.e. your situation allows you to take out a mortgage on standard terms, it is worth looking for the cheapest bank. When looking at the mortgage ranking, look out for a few conditions.
Commission for granting a loan
If you get a loan, you must pay a commission before the bank withdraws it. The commission for granting a mortgage is between 0% and 2% of the loan value. In practice, it may be so that with an average loan of 260 thousand. PLN commission may amount to over 5 thousand. PLN, which is quite a lot.
The monthly installment depends directly on him. The average mortgage interest rate ranges from 2.8% to 5%. It depends largely on creditworthiness. The same bank can offer extremely different interest rates to two different borrowers. Remember that the mortgage rate is variable , which means that your installment may soon fall or rise.
Additional Mortgage Costs
Mortgage rankings usually ignore additional costs. This is because it is quite difficult to compare them – e.g. a fee for early mortgage repayment, which can be up to 3% , depends on the period of earlier repayment and the amount you overpay. Such a fee may or may not apply.
APRC is the Real Annual Interest Rate , which in practice means the actual annual cost of the loan expressed as a percentage. APRC must take into account all costs, which is why it is the best indicator for comparing the loan price. The bank is required to provide the APRC, just as each mortgage ranking should list them with every offer. The APRC of the mortgage ranges from 2.8% to 5.5%.
The largest mortgage
If the amount of the monthly installment is of secondary importance to you, and the highest loan amount is of key importance, then the classic mortgage ranking will not be useful. In this situation, you need to look for a ranking that is a list of maximum creditworthiness at banks. It will be even easier to use the creditworthiness calculator, which will calculate the maximum amount available to you and indicate the bank that will lend you this much. Before you start counting your creditworthiness, check what has the most impact on it.
The basis of every mortgage – you must have a monthly, regular income. If you can take a loan with a second person, or even a third person, then your income will add up, increasing your credit standing.
The second key issue when calculating creditworthiness is the fixed monthly expenses of you and other borrowers. It is mainly about installments of other repaid loans, credit card limits (even unused), alimonies, etc.
Number of people in the household
This question applies primarily to children and spouses. Maintenance of each family member costs, that is, reduces the ability to pay installments. If you are going to take a loan with another person, and it does not have to be a husband or wife, then people from your co-borrower’s household will also be considered and will affect your creditworthiness.
The recommended own contribution is 20% of the property value. However, some banks allow a lower own contribution of 10%. If you are planning a mortgage, first check how much cash you can spend on your own contribution. There are various ways of dealing with a lack of money for own contribution, but it is better to assume that you will apply for a loan for a maximum of 90% of the property value, and the rest you will finance with your own contribution.
The longer the loan repayment period, the lower the monthly installment and the higher the possible loan amount. The times when the mortgage could be drawn for 50 years are gone. Currently, creditworthiness is calculated for a maximum of 30 years. If you have the capacity for such a period, then the bank can spread the repayment over several years, specifically over 35 years.
Mortgage Ranking – What to Follow?
If you are looking for the cheapest loan, look first at the APRC. It can be assumed that the lower the APRC, the cheaper the loan. If you are looking for the largest loan, use the ability calculator that will show you the maximum loan amount and the bank that will grant it to you.
Take into account that the bank does not have to grant you a loan on the same terms as the online ranking or ability calculator. The final offer will depend on your financial situation. Therefore, when choosing cooperation with a given bank, be guided only by a comparison prepared especially for you.