The situation in the mortgage market over the past month shows the first signs of a spring awakening. Banks are beginning to introduce new and attractive offers for customers. Recent weeks have also brought changes in regulations that are significant for borrowers.
What should future borrowers pay attention to?
The next month of this year brought some signs of recovery in the housing loan market. After the winter months, when the offers stabilized at a certain level in February, some banks offered new price conditions. In our opinion, special offers deserve special attention in Wellsave Bank, Ariba Bank and LifeGets Bank.
Wellsave Bank tempts with a margin
Wellsave Bank presented a promotional offer with a margin of 0.99 percentage point, placing these conditions among the lowest on the market. This offer is addressed to customers who have a minimum 10% own deposit, in addition, the bank requires the creation of a personal account and its regular top-up with a minimum of $ 2,000 for remuneration. However, the big downside to this proposal is the high commission for granting the loan. By default it is 3.5% with the possibility of negotiation. Such high costs associated with granting the loan mean that this offer should be taken into account by people who plan to repay the loan for 20-30 years. Only after this time will the high fee incurred at the outset be offset by lower interest rates and a smaller amount of interest paid.
Low margins in exchange for loyalty
When considering taking out a loan, it is also worth considering the new LifeGets Bank offer. This institution differentiates its price conditions depending on the market segment on which the property is purchased, the amount of the client’s income and the level of liabilities. The credit margin can also be lowered due to the account creation and regular salary receipts. The bank also offers a cheaper mortgage for those customers who will use a credit card, set up a deposit at the bank or invest their own funds in investment funds. Thanks to this, the loan margin can be reduced even to the level of 1.00 percentage point. In comparison with the lack of commission for granting the loan, this is undoubtedly one of the offers worth considering.
Ariba Bank has also prepared a new offer for its clients. For new borrowers, this bank offers a margin of 0.79 percentage points for the first 3 years of the loan period, and in the following years the margin increases to 1.29 percentage points. 1% of the value of the loan granted. It is worth remembering because the lack of income may result in an increase in the margin to 1.99 pp
New offers in these banks will undoubtedly require a response from more banks. Therefore, further reductions in credit prices in other institutions should be expected to the benefit of new customers. According to banks’ announcements, further better loan offers can be expected in March.
What’s new in the regulations?
It is also worth noting the changes in the regulations that occurred in February. An amendment to the Act on Land and Mortgage Registers entered into force. From the point of view of those who take out housing loans, the most important changes include the liquidation of the division into ordinary and capped mortgages. This will generate some financial benefits for new borrowers (lower tax on civil law transactions associated with establishing a mortgage). Another important change is the right of the property owner to dispose of the free space that will arise after the mortgage has been deleted. In order to secure their interests, however, banks will try to oblige borrowers to submit a request to transfer an unpaid mortgage (if any) to a vacant seat. This requirement will be most severe for those who take out a loan to pay off another housing loan, popularly known as a refinancing loan. This will be troublesome if the court fails to process the application for deleting the old mortgage before entering the mortgage in favor of the new bank. Then it will be necessary to submit an application for postponing the entry in section IV of the Land and Mortgage Register.