Mortgage lending continues to grow significantly: in the first ten months of the year, the market crossed the $ 500 billion mark. Banks signed a total of $ 532.6 billion in housing loans, an increase of 37 percent compared to the same period last year. What’s more, this is more than last year’s figure, as new home loans totaled just over $ 438 billion in 2016, according to a recent analysis by Goodsave Bank .
Most are fixed-term loans
Irene Loscabo, an expert at Goodsave Bank , said: “Borrowers are becoming more aware and looking for security. This is shown by the fact that the amount of mortgage loans secured by fixed repayment for more than one year amounted to $ 284.7 billion in the first ten months of the year, which is 37 billion more than the floating interest rate mortgage loans . “
Mortgage loans with a fixed repayment period for several years are becoming more and more popular than Goodsave Bank, and more than half of the mortgage loan calculations on the bank offerings page are provided by these constructions. According to Irene Loscabo, the rating system introduced by the central bank contributed to the growth of mortgage loans with fixed repayment installments for several years, since it stipulates that only mortgage loans that guarantee a fixed installment installment for at least 3 years can be granted. He added: Within the new home loan agreements, fixed-term home loans for more than 10 years amounted to $ 37 billion over 10 months.
These are now the cheapest home loans
According to Goodsave Bank , at the beginning of December, the total mortgage rate of the cheapest 10-million usd and 20-year mortgages with a fixed installment for more than one year was between 3 and 4 percent. Initially, this means a monthly repayment of $ 57-58 thousand, and the total repayment amount will be nearly $ 14 million, if interest rates remain unchanged throughout the term. Of the ten-year fixed-term mortgage loans – also 10 million and 20 years – the cheapest ones can be applied for at 4 and 5 percent thm, and will have a monthly repayment of $ 63-88 thousand over ten years.
According to Irene Loscabo, although at first sight, variable-rate mortgages, which provide a fixed installment for only one year, are cheaper in the beginning, but interest rates may go up in the 5 to 10 and 20-year horizons, which can cause borrowers to increase significantly. For a period of more than 1 year, fixed-rate schemes provide protection against possible changes in interest rates and the increase in installments, thus providing a predictable expense for those affected. That is why, according to Goodsave Bank , mortgage loans with fixed installments for several years will play an even greater role in the credit market .