Rally of fixed mortgage rates

New housing loans by all systemic banks to have increased cost for long-term borrowing

Rally of fixed mortgage rates

Banks are increasing their fixed interest rates in new mortgages by up to half a percentage point, incorporating in their rate lists the upward trend of the cost of money in view of the increase in the European Central Bank key interest rates.

Last week, National Bank increased fixed interest rates for all maturities from 0.20 to 0.50, while Alpha Bank will start applying new fixed interest rates increased to 0.40 as of July 4. Eurobank has already started adjusting its fixed interest rates since mid-May and does not rule out a new increase, while Piraeus Bank is also preparing adjustments in its tariffs.

Therefore the fixed interest for 10 years by National Bank, based on the new rates published by the bank, is going up to 3.30% or 3.70% (from 2.80% or 3.30% that was until recently), the rate for 15 years is 3.55% or 3.95% (from 3.15% or 3.65%), for 20 years from 3.80% or 4.10% (from 3.35% or 3.85%) etc.

Likewise, the fixed interest rate of Alpha Bank for the first five years increases from next month to 3.20% from 2.80% today, the fixed 10-year rate to 3.40% from 3%, the 15-year fixed rate to 3.60% from 3.20%, the 20-year rate to 3.80% from 3.40% etc, while interest rates increase further by 0.20% in case of financing more than 60% of the estimated value of the property.

Eurobank’s fixed interest rate for three years is set at 2.90%, for five years at 3.10%, for 10 years at 3.50%, for 15 years at 3.70%, for 20 years at 3.90% etc, while Piraeus Bank currently applies fixed interest rates from 2.95% to 4.35% for 30 years, which, however, are expected to increase too.

Bank executives explain that the rise in interest swap rates, which has skyrocketed by close to 2.40% for the decade, has increased costs for banks to lock interest rates for long fixed maturities such as 10, 20 or even 30 years. Yet even after the recent increases, the current fixed interest rates are seen as a “window of opportunity” for those who want to ensure a low tranche for long, as according to forecasts the rate rise in this category could reach up to one percentage point by the end of the year.

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