LOW INTEREST RATES AND LOAN TRANSFERS: SOLUTIONS TO THE AFTERMATH OF THE PANDEMIC

As a result of the changes that have occurred worldwide due to the pandemic, economic slowdown, and the search for new apartments for sale in Medellín that meet new needs, banks have been forced to lower their interest rates on financial products. Mortgage loans, being long-term products, have been among the most impacted. When economic changes push banks to reduce interest rates, they usually do not contact existing clients to adjust their rates to current market conditions. Therefore, the best option is to transfer the loan to another financial institution, improving not only the interest rate but also the term of the mortgage loan.

Since March 2020, banks have launched mortgage loan transfer campaigns with interest rates never seen before. Colpatria Bank was a pioneer in this initiative, and months later other banks followed, offering more affordable and competitive loan transfer rates for clients looking to buy an apartment for sale in Medellín and who require a home loan.

Why should you transfer your mortgage loan?

According to an interview with Mabel Quintero Giraldo, Mortgage Loan and Residential Leasing Advisor at Alberto Álvarez Real Estate, this is a long-term financial product, and market interest rates constantly change. If your mortgage loan was disbursed five years ago, the interest rate you are currently paying is likely high. The best way to improve it is by transferring your loan.

Do I need to re-register the property when transferring a mortgage loan?

No. Only a promissory note endorsement is required, which is handled by the bank purchasing the loan from the institution that currently holds the mortgage. The original mortgage bank will still appear on the property deed, but the promissory notes—the legal backing documents—will be held by the bank purchasing the loan.

What costs are involved in transferring a mortgage loan?

The costs associated with this process include property appraisals, which depend on the commercial value of the property. If a title study is required, the cost depends on the bank purchasing the loan and typically ranges between COP $78,000 and COP $250,000 (some banks do not charge this fee).