It is difficult not to get lost in all this and find a solution perfectly suited to our needs.
The first step we need to take is to familiarize ourselves with the mortgage offers of leading banks. When conducting such a review, it is best not to be guided by special promotions that you can take advantage of “only now.” You can learn more about the trap of such offers here.
There are now many comparison websites for banking services and products, including mortgages. They play a useful role; however, as everywhere, not every one of them is a reliable source of information, and they will not draw our attention to the parameters of the mortgage we plan to take out that are genuinely important.
Stay informed!
First and foremost, in order to choose the right mortgage for us, we should take a creditworthiness test, which will show us exactly what mortgage we can afford and how high a payment it will entail. You can find a sample test at: https://hipoteki.net/. There you can also compare mortgages from more than twenty banks.
The main factor to pay attention to when reviewing a bank’s offers is the bank’s margin, which affects both the total cost of the mortgage it will generate over, for example, 30 years, and the amount of each individual payment. The interest rate, which includes the margin, can sometimes amount to almost as much as the sum we borrow, especially with loans featuring very long repayment periods.
At the same time, it is not worth agreeing without consideration to a margin reduction, even by half, in exchange for cross-selling products. Additional insurance may consume more of our money over the entire period than the higher margin we would pay under the standard option.
Balancing the loan term and the monthly payment is not easy…
…but it pays off. The second important issue is matching the length of the repayment period, and consequently the monthly payment, to our financial capacity.
Experts recommend a repayment period of 20 years. Naturally, this depends on whether we can afford the higher payment. For example, it will be almost PLN 400 higher for a PLN 400,000 mortgage with a 20% down payment and an interest rate of approximately 4.75%. We could think of this amount as an investment, because it is rare for people to regularly save such a surplus. It is important to know that the total cost of the mortgage over a 20-year repayment period will be more than PLN 100,000 lower because of the lower total interest. Savings on mortgages of this length, including those for smaller amounts, should certainly be seriously considered.
Mortgage costs include more than just interest and commission
Taking the most important criteria into account will allow us to filter out the most advantageous offers. These criteria also include the amounts of basic commissions, which are better considered before taking out the mortgage than when we decide to repay part of it early. We may then face an early repayment commission. The same applies to the bridge insurance required at the beginning, which we pay until the bank receives the mortgage entry in the land and mortgage register. Knowing whether it is 1.5 or 2 percentage points allows us to calculate the costs more accurately and simply add them to the best results for the individual mortgages obtained using a mortgage calculator. Then we will be able to make our choice with fairly great peace of mind.