What kind of loan is best for me?
As responsible lenders, we want to help you out in making the right decision for your home loan. Choosing the right plan is essential for such an important choice, and we’ll help you out in choosing the best plan for you.
There are two types of financing options to choose from. The traditional home loan provides you with the cash you need to buy your home, whilst an APlus account offers a combined experience that provides you with great flexibility.
Here is a little more information on both of these products.
Traditional home loan
A traditional home loan provides you with the money you need to buy a home. Loans are typically available for up to 90% of the property value and payable over a period of up to 40 years.
The advantage to taking a traditional home loan is that it offers a predictable loan repayment each month and a set interest rate. It is the way thousands of Maltese have bought their homes since APS Bank was founded. It’s still here because it works.
Home loans benefit from:
- Up to 90% of property value with a payment period of up to 40 years
- Competitive interest rates
- No bank, legal, architect or early repayment fees
Here’s how it works: A € 100, 000 loan for a home will be divided into monthly payments over the agreed term of the loan. Payment will include some of the amount borrowed and interest at the applicable rate.
It is important to note that while the monthly payment will be lower, the overall cost of servicing the loan, i.e. the interest, will be higher over the long term.
An APlus account provides you with a new way of borrowing that takes into account modern lifestyles, competing priorities and the flexibility many families need. The package can include an overdraft, home loan, savings, debit card and credit credit card, providing a single pot of money with a credit limit of the amount of a home loan. APlus is only offered at APS Bank.
When money is deposited into your account the loan is reduced. If you have a savings account the interest is taken off what you would pay on your loan. It’s an easy way to manage your money long term.
Here’s how it works: If you needed to borrow €100,000 for a home and took out an APlus account, you would essentially have a €100,000 overdraft. If you paid in your salary of €2,000 a month, your overdraft would reduce by that amount.
As you spend your salary, the overdraft increases by the amount you spend. Whatever is left over can count against the overall debt and help pay it off earlier.
How much can I afford?
We have provided a home loan calculator that can give you a good indication of the loan you can afford. It’s a great place to get started in understanding how much you can borrow, and what property you can afford.
APS bank offers home loans for a range of circumstances, including:
- To buy land and build your own home
- To buy a project for renovation
- To buy a complete home
- To renovate your existing property
- To buy a second or holiday home
- To refinance existing loan(s)
Calculation is based on the basis that (i) the property being purchased will serve as your primary residence and (ii) you have no outstanding home loans upon the signing of deed.
Here are the interest types available on our home loans:
Variable rate loan
A variable interest rate follows the market and is usually defined as “market rate plus 1%” for example.
Fixed rate loan
A fixed interest rate is set when you take out a home loan. It does not follow the market and will stay constant throughout the term of the loan.
Interest only loan
An interest only home loan only requires you to pay the loan interest on a monthly basis, with the capital repaid in a lump sum at the end of the term.
Contact one of our home loan advisors today to learn more!
Disclaimer: Our home loan calculator is not an offer or solicitation of a loan but merely an indication of your borrowing power. You are requested to contact APS to schedule an appointment with one of our expert loan advisors for further assistance of your home loan application. Terms and Conditions apply.
What other costs should I keep in mind
The actual cost of the property you’re buying is part of your impending expenses. You will also have a number of fees and taxes to pay, although we’ll make it easier for you as our own fees won’t be among them!
Some fees that are worth considering are:
The Notary is a publicly appointed official who will prepare and order on your behalf all the legal documentation including Public and/or Lands Registry Searches, necessary to publish your deed of loan and sale. You will need to factor in around 1% of the purchase prices to cover their fees.
If you used a real estate agent to find a property and had their assistance throughout the process, the seller bears the fee. On the other hand, if you use a broker (sensar), the buyer and the seller both pay part of his fee. This is normally around 1% of the purchase fee (plus VAT).
Your deed will be registered at the Public Registry and/or Land Registry at a cost based on an official fee schedule.
Other fees and costs would include:
- Public and/or Lands Registry searches fees
- Stamp Duty
- life and building
- Insurance Premia
- Legal Fee
- Architect’s Fee
Even though it is recommended to have assessed the affordability of a property before you began your search, a more formal quotation is necessary. You need to know for sure how much you can borrow, how much it will cost per month, how much of a deposit you will need and whether your initial assessment of affordability was accurate or not.
Book an appointment with one of our specialist advisors to talk through your plans, assess your suitability for a home loan and decide how much you can realistically afford.