The "From" Interest Rate Trap in Mortgages
It is common to see in advertising an extremely attractive initial interest rate, always preceded by the word "from". This strategy aims to grab your attention quickly, but it rarely reflects the real offer you will receive. In practice, it works as a commercial lure to generate leads. 🎣
The Ideal Profile: An Almost Perfect Customer
That promotional rate is not for the majority. Banks reserve it for a minimum percentage of applicants who must fit a high economic profile. To qualify for it, the entity requires meeting a strict list of requirements that usually appear in the fine print. If you do not meet them, the interest rate applied to you will be considerably higher.
Common Conditions to Access the "From" Rate:- Contract linked products, such as home or life insurance with the same entity.
- Direct deposit your payroll and other bills, committing your banking relationship.
- Demonstrate a high income level and an indefinite employment contract.
- Request a low loan amount in relation to the value of the property (a low LTV).
"The 'from' rate is the cherry on top, but to get it, you first have to buy the cake, the plates, and hire the chef."
Compare Mortgages with Real Data, Not Ads
To avoid unpleasant surprises, do not base your decision on the ad headline. The key tool is the Precontractual Information Sheet (FIPER). This standardized document, which you must request from each bank, details all costs clearly and comparably.
What to Look for in the FIPER:- The Nominal Interest Rate (NIR) that will apply to your specific case.
- The Annual Equivalent Rate (AER), which includes fees and expenses, reflecting the real annual cost.
- All associated fees: opening, cancellation, partial amortization, etc.
- The binding conditions that affect the interest rate.
Conclusion: Beyond the Lure
Choosing a mortgage requires analyzing the complete offer that the bank prepares for your personal situation. The promotional figure is just the starting point of a negotiation. Comparing several FIPERs allows you to evaluate the total cost of the loan over the years and make an informed decision, away from the impact of marketing. 📄✅