Dutch financial giant ING continues its aggressive bid for Spanish mortgage customers by offering one of the most talked-about products on the market: the mixed-rate mortgage. After a spring rate revision, this offer is especially appealing for those seeking stability in the early years of repayment, yet willing to accept a variable rate in the long term.
At first glance, the conditions seem more than attractive. The bank fixes the interest rate at just 2.3% for a full five years. This gives borrowers confidence and a clear picture of their monthly expenses over a fairly long period, shielding them from fluctuations in the Euribor, Europe’s interbank rate, which in recent years has caused plenty of headaches for homeowners.
However, as is often the case with banking products, the devil is in the details. To secure the coveted 2.3%, customers must meet a string of requirements. It’s not enough to simply open an account — you also need to have your salary paid into ING, and purchase two insurance policies, both for the property and for life, directly with the bank. Without all three, ING’s initial generosity disappears. The fixed rate instantly jumps to 3.28%, and in later years the margin rises to Euribor + 1.29%. That half-point difference over a long term can add up to thousands of euros in extra payments.
After the initial five years of fixed payments, the mortgage loan switches to a variable rate. From this point on, the payment amount will depend directly on Euribor rates and will be recalculated every six months. This means that if the European index rises, your monthly mortgage payment will also go up. Meanwhile, the requirements for salary deposits and insurance remain in force: to keep the minimum margin of 0.79%, you have to stay a loyal client of the bank for the entire loan period.
On the plus side, there are no fees for opening the loan, changing its terms, or making partial early repayments. This allows you to pay in extra amounts without penalties. However, paying off the mortgage in full is a different matter. If you decide to close the mortgage within the first five years (during the fixed-rate period), the bank may charge a fee of up to 2% of the remaining balance. In the variable rate period, the penalty is much lower and does not exceed 0.15%.
Another feature of this deal is its very flexible repayment term—from 6 to 40 years. This is more than most competitors offer, as they typically cap loans at 30 years. A longer term reduces your monthly payments but it’s important to note that the total interest paid over the life of the loan will be noticeably higher. There is also an age restriction: by the time the loan is paid off, the borrower must not be older than 75.
It’s also important to note that this product is intended exclusively for purchasing a primary residence. It cannot be used to finance investment properties or second homes. The bank is willing to cover up to 80% of the estimated property value, requiring the buyer to provide at least 20% of their own funds, plus money for taxes and other expenses. The minimum loan amount is set at €50,000. In summary, ING’s offer could be a great option for those looking for a long-term relationship with the bank, but it’s crucial to carefully read all the fine print and details in the contract.
