Deciding where to buy a home is a momentous financial decision. Mortgage interest rates, as one of the most influential factors, can make the difference between a dream come true and an unattainable goal.
Mortgage interest rates are determined by several factors: inflation and the economic stability of each region. In countries with more stable economies and low risks, banks tend to offer lower rates, since the risk of default is lower.
According to an analysis prepared by DineroMX, in Mexico, mortgage rates, at the end of 2024, are around an average of 11.5, according to the Bank of Mexico. Banks offer different types of mortgages, such as fixed-rate mortgages, which maintain the same interest throughout the life of the loan, or variable-rate mortgages, which can be revised every certain period of time.
To obtain a mortgage in Mexico, you are generally required to be between 21 and 65 years old, have verifiable income of at least 15 thousand pesos per month, and a favorable credit history.
Mortgage rates in the United States
In turn, in the United States, mortgage rates reached approximately 6.4% for 30-year loans in 2024. It is worth mentioning that the United States is a country that has a more structured financing system, where entities such as Fannie Mae and Freddie Mac help make obtaining mortgages more accessible, since they buy these loans from banks and help reduce risks.
Buying a house in Mexico: How much do families need to earn?
Credit history is a highly decisive factor in the United States since a good rating can guarantee a lower interest rate and better loan conditions. Typical terms in the United States are 15 and 30 years, and there are both fixed-rate and adjustable-rate options, where the rate can change after certain years.
Mortgage Rates in Europe
While the European market shows a notable variation between countries, in Germany rates are around 3 to 4%, while in Spain and France they range between 3 and 5 percent.
It is important to note that the European mortgage system is characterized by its conservatism and stability, with strict credit evaluation requirements and more conservative loan ratios.
Most countries offer both fixed and variable rates, with terms that can also extend up to 30 years.
Variables to consider
Evaluating a mortgage loan involves considering more than just the interest rate, as there are additional costs that can raise the total cost. In Mexico, life insurance is paid through the monthly mortgage payment and protects the balance of the loan that was granted, while in the United States and Europe property insurance is required.
Property taxes, which vary by region and impact the total cost, and closing costs, which include commissions, deeds and fees, must also be considered.
“The choice of the ideal place to finance a home will depend on the priorities of each buyer. Those looking for low rates and security may find Europe a good option. Those who prefer a more dynamic market with greater growth potential can consider the United States or Mexico. However, it is essential to carry out a detailed analysis of each market, considering factors such as economic stability, the outlook for the real estate market and the personal conditions of each buyer,” concluded the director of DineroMX, Alejandro Sena.
Source: realstatemarket
