More reference indexes

IRPH

There exist 3 types of IRPH (Index of Reference of Mortgage Loans). That of the banks, that of the boxes and that of the set of the financial institutions. It is an average of the interest rates to which the entities are granting the mortgage loans in this moment, in the set of banks, boxes or the whole of financial institutions.

Therefore, the reference indexes serve so that when the interest of the loan is checked this one remains exact at the prices of the market since, as we have seen, these are only the average of the interest rates to which the money is lending.

Remember that the called 'differential' is applied to him to the elected reference index. The entities do this because to give an individual has major risk of non-payment than to be big enough to another bank and, to compensate this risk, the entity is going to receive a higher price from us.

Since we have already commented, the interest that we are paying modifies every time certain one, according to the agreed thing previously, ej. every half year, annually. From this moment and up to the new review, the interest rate of the loan will be the result of adding the differential to the last index of available reference that, normally, corresponds to last month or the immediately previous one. For example:

If we have agreed on the Euribor + 0.75 % (the differential), to check every 12 months, and the Euribor at the moment of the review is to 2.25 %, then 3 % is what we will pay of interests for next 12 months, up to the following review.