Although the longest term is preferred when applying for a mortgage loan for the purchase of a house, this option means paying a much higher interest rate. You could even end up paying more in interest than the home is worth.
Monserratte – a 45-year-old professional – has just received a mortgage and is ready to move into one of the properties located in the La Aurora sector, in Daule. He opted for a longer term granted to him by the Bank of the Ecuadorian Social Security Institute (Biess) because he has another debt to buy his car. For the $77,000 loan, she will pay $534 in installments and has considered doing it in less time, but says she prefers not to be so financially stingy with a $600 installment, which she says she would have to pay each month if is a loan that I took for 20 years.
She will pay $60 less each month because she chose a 25-year term instead of a 20-year term. However, you will end up paying more interest.
64% of mortgages are financed with the longest term in Biess
The longer the term, the lower the fee, but at the end of the loan, the burden of interest is felt. This can be seen during prequalification on the Biess portal, for example, for a loan of $90,000:
Antonio was warned about this when he was paying a down payment on his house and wanted to take out a 20-year mortgage, so when it came time to apply for a loan, he decided to finance his house for $45,000 over 15 years. His fee is about 500 dollars.
Mortgage loans in Biess: your interest rate depends on these three factors
The cost of financing also depends on the term, amount and type of real estate. So, in Biess, these are the interest rates for mortgages:
Preferential accommodation up to USD 90,000
Ready Mortgage or Single Family Home $90,000 to $130,000
Ready Mortgage or Single Family Home $130,000 to $200,000
Finished, mortgaged or multi-family dwellings in excess of $200,000
Home Construction/Mortgage Replacement up to $130,000
Home Construction/Mortgage Replacement $130,000 to $200,000
Residential construction / mortgage replacement over $200,000
Acquisition of other real estate: offices, business premises and offices
Remodeling, expanding or improving the home
land for housing
Source: Eluniverso
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
