Banks Prep For New War On Prime Mortgages

18/02/2014 – ExpansionPro

The first was Bankinter, then Santander and now Sabadell joins the battle for the best conditions´mortgages. Together with ING and Kutxabank, they are the most persisting about the prime mortgages.

Banks need to raise their credit investment in order to improve the margin revenues. Entites that will be able to let the cash flow will also gain an excellent opportunity to become a reference in the segment.

In such context, several entities already sell their mortgages at Euribor rate plus 1.50%or 2%, but only under circumstances when a clients bind themselves with additional services (salary, cards, insurance, etc.). This is the lowest diffrential offered currently on the market that reached 5% over the benchmark.

Four months ago, Bankinter launched its “Hipoteca” campaign and has “already multiplied the mortgage granting by 2.3 in the fourth quarter of 2013, reaching €243 million, compared to the same period last year”. The bank is being optimistic in regard to future sales volume and claims that “the time for gambling on the real estate market came just right now, when no one does it”.

In January, Santander released its Euribor+1.99% offer at 2.95% interest rate in the first year. Now Sabadell is following the steps. The bank has cut its differencial rate over Euribor by 50 basic points, from 2.50% to 2%. Moreover, the entity is to change internal structure of mortgage granting and rejecting processes. (…) Sabadell aims at increasing its mortgage number from 10.200 in 2013 up to 13.200 this year, granting by 30% mortgages more.

Kutxabank bet for the fixed rate mortgages between 3.90% and 5.24%. Its variable offer is one of the most competitive, taking differential rate of 1.25%- 2.50% when linkage accepted.

Original article: ExpansiónPro (Ana Antón)

Translation: AURA REE