Bonded mortgages are used by banks and savings banks to build customer loyalty . These mortgage loans offer a discount on the interest rate in exchange for the client linking with the entity contracting a series of products, such as insurance, pension plans, cards or simply directing the payroll and basic household receipts.
We must make numbers and know in advance the real cost of the products added to the mortgage As Fotocasa explains, for each of the products that we hire we get a reduction of the differential over the reference index in a certain percentage. But this series of products considerably raise the cost of the mortgage. On the one hand we subtract, but on the other we add.
So we must do numbers and assess what compensates us more , if we hire a mortgage with a slightly higher interest rate or opt for a mortgage loan that nevertheless increases the final cost of the mortgage.
One way to decide is to know in advance the real cost of the products that should be linked. In many cases, a housing loan with a high interest rate may be cheaper than another with the lowest interest rate but which requires the hiring of certain products.
Insurance, many insurance
Insurance is, as a rule, the most expensive the final cost of the loan while domiciling the payroll and receipts as soon as they represent an expense , provided that the account where we domicile does not have commissions. The basic list is as follows:
- Life insurance
It is the most expensive. It covers the risk of death of the loan holder. That is, if he dies, it is the insurer that is in charge of canceling the outstanding capital. Its cost is usually between 300 and 800 euros per year. Thus, for a mortgage of 120,000 euros with a term of 20 years, it means an additional outlay of between 6,000 and 16,000 euros more to add to the final cost of the loan.
- Multi-risk or home insurance
It covers not only the continent (the house) but also the content (furniture, appliances, etc …). It usually has an annual cost that can range between 200 and 400 euros, that is, between 4,000 and 12,000 euros more than adding to the final cost of the mortgage.
- Payment protection insurance
This guarantees the payment of a series of fees determined in advance in case of loss of income, it also has a high premium that is usually between 1 and 1.5% of the capital loaned. It is usually paid at one time when the mortgage is constituted, adding the amount of insurance to the borrowed capital.
Although they do not usually represent important expenses, the bank can demand a minimum expenditure per year with them. Some subsidized mortgages offer discounts also for hiring a pension plan that also usually require minimum annual contributions.
Let’s do numbers to know what makes up for us more. However, if we hire a subsidized mortgage, we can always cancel any of the products associated with the loan after the first annuity. But in that case, we must know that for each product we suppress the interest rate will rise in the next revision of the monthly fee.