Purchase and Restructuring Consolidation and Liquidity Subsidiary and Refinancing Typologies of Rates Find Branch
The rate applied to the loan represents a key element at the time of applying for the loan , as it determines the amount of the installment that the Customer must return to the Bank. There are two types of interest rates related to the mortgage : fixed or variable . The variable can be with CAP or with Protected Installment .
The reference parameters:
- Fixed Mortgage
The rate applied to the loan (valid for the entire duration of the contract) is determined based on the value of the Eurirs parameter (10, 15, 20, 25, 30 years) rounded to the hundredth and increased by a fixed percentage (spread)
- Variable Mortgage
The rate applied to the loan is determined on the basis of the value of the Euribor 3 Months / 365 parameter rounded up to the hundredth and increased by a fixed percentage (spread), according to the following method: Euribor 3 months / 365 + spread
Below we offer an exhaustive overview of the different types of rates.
The Fixed Rate Loan
This product requires that the rate does not change for the duration of the loan. The installment defined at the beginning, and the amortization plan, always remain the same. The fixed-rate mortgage therefore offers the certainty of the amount of the installment that does not change over time.
The variable rate mortgage
This is a type of loan for which the rate is updated monthly, based on the change in the reference parameter (3-month Euribor). The installment may decrease or increase compared to the initial one, depending on the trend of market rates. The variable rate mortgage therefore implies that the installment will undergo changes over time, with consequent advantages in the event of a fall in market rates.
Variable Rate Mortgage with CAP
Thanks to this type of loan it is possible to combine the variability of the rate based on the reference parameter (3-month Euribor), with the certainty of a limit beyond which the interest rate cannot increase. The installment may therefore decrease or increase with respect to the initial installment, but the CAP, the maximum fixed rate ceiling, represents a threshold that cannot be exceeded for the entire duration of the loan.
Variable Rate Mortgage with Protected Installment
The product provides for the installment to be blocked for periods of 12 months and updated at the end of each period, based on the rate trend. In the event of a decrease in the rate, the repayment of the loan may take place more quickly, while if the rate increases, the increase in the installment will be limited by a percentage equal to the Istat index. The secured installment loan therefore offers the certainty of a fixed rate, protected from any increases in market interest rates, with the convenience of a variable rate product.
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