06 Aug 2009 2:53 PM:

Thank you everyone and Sharonw - thats exactly what I'm finding out after talking to a few banks.

They kind of chuckle when I ask about a fixed rate interest - its so unheard of and so few banks do it now that they say those that do, its so expensive that its really not worth it. Some banks have offered to extend the time period of revaluation to reassess the % interest rate from yearly to every 3 years, but still not do a fixed rate....

12% seems to be the standard "cap" but they also say vaguely "Well, we won't charge you more interest than we do on personal loans" which isn't much help as they mean credit cards and so on that can charge over 25% interest!!!

I've talked to 2 banks over a period of time and the going rate now seems to be no floor/collar - basically the collar is their own interest rate - say the EURIBOR is at 0% (near impossible but whatever) and the banks interest rate is 2% - well the "collar" would be 2% and couldn't fall below the bank's own rate....

It just seems like a lot to leave up to the markets, on both side of the fence, and a lot of trust is needed, which in this day and age, trust in the system and banks is falling rapidly!!!

Thanks again everyone!! :)

Thread: Cap and Collar Limits on Mortgages?

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05 Aug 2009 12:00 AM:

Hi all!

I registered for this site just to post this question -

Are there such a thing as caps on Spanish mortgages so that the EURIBOR doesn't raise to 10% in the future and you are stuck paying EURIBOR + (your banks interest rate) lets say 3% for a total of 13%. We are all fine when the EURIBOR is between 2 and 4% (or less) but are there defined limits to a maximum interest rate?

If so, is this over the life of a loan, or can they change the terms later? Does ANYONE have this in their contract or do we all just have faith that the EURIBOR won't raise to that ridiculous level?

Some advice would be helpful!!

Thanks in advance, its greatly appreciated!!

Thread: Cap and Collar Limits on Mortgages?

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