Sometimes, when we receive the bank’s schedule, we don’t look at how the rates are. Nor, when we go to the bank. Could it be that we miss something important, such as saving money?
Yes it’s correct. One way to save money is to be aware of the value of the fees. It might be a good time to lend or a good time to move that mortgage loan you pay each month to another bank. We go in parts:
Financial institutions charge “interest” for their work. The way to set the value is through the rates . Interest answers this question: how much is this money worth at this time?
What is TEA and TCEA:
Mortgage loans handle two rates:
The TEA is the Annual Effective Rate , that is, the value charged by the bank for lending money for 12 months.
When negotiating a loan it is essential to know both values.
In accordance with the law, financial institutions may charge commissions or postage for contracting the insurance of relief and all risks ; r dministra and policies are endorsed.
Why are rates modified?
Rates move all the time. Many factors affect the cost of money. For example, supply and demand: if there is an abundance of money in the market, few people are interested in lending. Banks lower rates.
The economy, do lar, oil, inflation or government and Central B ank of Peru measures, among others, move rates up or down.
Likewise, the operating cost of financial institutions and the profit margin is reflected in the value of the fees. Therefore, when taking a loan, it is important to verify who offers the best rates.
Who modifies the rates?
The Central Reserve Bank of Peru sets the representative market rates. And each financial entity determines its own interest rates . It is a free and competitive market. If a bank has very high operating costs (local, personal, insurance, risks, etc. ), its rates will be high.
What effects do rates have?
Rates go up and down by cycles. Governments are attentive to modify them to encourage the economy or to lower inflation . When rates are low, the credits and indebtedness of individuals and businesses increase. The economy moves. When rates rise, it is a good time to invest in financial papers as term deposits.
In your mortgage loan, the effect of the fees is reflected in the value of the monthly installment. A slight decrease will produce savings.
What is the best rate?
There are several modalities. For example, the variable or mixed rate is designed to be modified when rates rise or fall . Each month, the fee may be different. The fixed rate, on the contrary, is an agreement between the parties so that the rate is maintained from the beginning to the end. The quota one will be equal to the last.
The best rate will be the one that suits the needs of each client.
How to take advantage of the rates?
Good question. As rates change over time, it is important to review the mortgage loan businesses. For example, since last year the trend in rates is down; At the same time your credit is at a slightly higher rate than the market handles today . In that case, a transfer may be convenient.