Just when we thought it was all doom and gloom with banks and their lending criteria a re-mortgage product has come to the market offering Mallorca residents and non residents the opportunity to substantially reduce monthly repayments without the usual costs associated with transferring a loan from one lender to another.
The product offers residents a mortgage rate of euribor + 0.35% and non residents euribor + 0.5 - 0.7% (dependent on the income profile of the client, loan amount and LTV). These rates apply throughout the term of the loan and are not limited "introductory offer" rates as is often the case.
On top of that the bank will cover all Notary, Gestoria and Land Registry costs and incredibly will accept an official valuation the owner may have from the original purchase or mortgage of up to 5 years old (ie if you have an official valuation of your property that is under 5 years old the bank will not require to you to pay for a new one, a saving of circa 400¬)
The only costs not covered are any cancellation fees on your existing mortgage although these can always be added to the new loan amount to help you pay (eg on a 300,000¬ loan with 0.5% cancellation fee of 1,500¬ a new loan of 301,500¬ will be granted. Generally there is a small 0.25% arrangement fee which is easily covered, within 2 or 3 months, with the savings in monthly repayments.
Options include a fixed rate for the life of the loan, a fixed rate for the first 5 years or a fully variable rate that is reviewed annually.
In terms of paperwork key is proof that your current mortgage is fully up to date and that the last 6 monthly payments have been paid on time. Other documentation required is your last tax return, last 3 wage slips, bank statements showing the income etc.
