Mortgage loans granted reach new high as redemption penalties scrapped and advice regulated
Sunday, July 31, 2016 @ 10:47 PM
NEW mortgages taken out to buy property in Spain have reached a record year-on-year high, rising by 10% since April and marking two years of growth – and at the same time, a new EU directive implemented means paying off a mortgage early will no longer attract redemption penalties if it has been live for longer than six years.
At five years, the redemption penalty is capped at 0.25% of the loan, but if the consumer has signed for repayment conditions more favourable to him or her than the bank’s standard rate, the one that comes in at the lowest cost to the customer will apply.
Mortgage-holders now have the right to change the currency of their loan, and banks are not allowed to ‘forcibly’ sell other products as a condition of offering the mortgage, such as insurance which can be obtained elsewhere.
But there is no rule preventing banks from offering a better mortgage deal in exchange for taking out such products.
Even better, mortgage advice is now regulated and those who provide it may be required to hold certain qualifications, prove they have undergone certain training, and adhere to consumer codes of conduct.
Read more at thinkSPAIN.com