BANKING

Fixed rates steal show in mortgages

fixed-rates-steal-show-in-mortgages

Banks are recording a shift toward fixed interest rates in new housing loans, away from the dominance of floating rates that was evident in the mortgage market for about two decades.

That is according to the latest data on housing loan applications, showing that those who choose fixed rates for long periods range from 40% up to 90%, depending on the bank.

The swing to fixed rates is the result of the general drop in the cost of borrowing in recent years, thanks also to the increased liquidity deriving from the European Central Bank’s monetary policy easing that has effectively put fixed rates on a par with floating ones.

Therefore the average floating rate in a mortgage currently comes to 2.30-3%, depending on the client’s relations with their bank, while the fixed rate for up to 20 years comes close to 2.80%, sometimes even more attractive than a floating rate.

Bank officials explain to Kathimerini that the fixed rates banks are offering concern periods of 10, 20 and 30 years, allowing for the fixing of installments at a rate that constitutes a historic low for the Greek mortgage market.