Translation from Google translate, but below is how APR is calculated. Looks like life assurance is renewable annually, so the premium would increase each year.
I don't fully understand why their APR is so much higher than quoted rate.
20-year Fixed Mortgage: The following is a representative example of a fixed-rate TAE mortgage loan offered by Bankinter SA, based on the characteristics indicated below:
Loan amount: € 150,000. Loan term: 20 years (240 monthly installments). APR: 2.92%. Monthly fee for 20 years: € 758.11. Last installment: € 759.55. Opening Commission: 1% with a minimum of € 500 (€ 1,500). Total interest: € 31,947.84. Interest rate: 1.99% (240 months). Monthly fees.
Interest rate conditioned on the contracting with Bankinter of the products indicated below:
- Payroll, Professional Account or Non-Payroll Account (Bonus of 0.50 percentage points).
- Life Insurance for 100% of the amount of the mortgage loan, contracted with Bankinter Seguros de Vida SA of Insurance and Reinsurance (Bonus of 0.60 percentage points).
- Multi-risk Home Insurance with coverage of a minimum of € 30,000 and a capital of continent equivalent to the appraisal value of the property for insurance purposes, contracted with Línea Directa Aseguradora, SA and under the intermediation of Bankinter SA, Banking Operator- Insurance (Bonus of 0.10 percentage points).
- Pension Plan / EPSV: Having a pension plan / EPSV with the Bankinter Seguros de Vida company, belonging to the Bankinter SA Group, and making a minimum annual contribution of € 600 (Bonus of 0.10 percentage points).
The hiring of such products as described is optional for the Client, increasing to the previous rate (1.99%) the 1.30% corresponding to each of the non-contracted products, so if none is met of the conditions, the interest rate will be 3.29% (APR of 4.02%) and the total amount owed 215,415.68 €. In calculating this APR, the costs of hiring a home insurance for the amount of € 100,000 of the continent and € 30,000 of content and estimated annual fee of € 343.97 were taken into account. Tax on Documented Legal Acts: € 1,349.89. Administrative expenses: € 431.97. Valuation: € 332.75. Life Insurance Premium: € 190.86. Annual renewable insurance for an amount of € 150,000 for 20 years for a 30-year-old man. These costs derived from the formalization of the contract in public deed, have been calculated under the assumption of a home valued at € 187,500.00 located in the Community of Madrid, may be different depending on the Autonomous Community where the house is located. Notarial expenses are not included, nor those corresponding to the previous sale for not intervening in the calculation of the APR.
Total amount owed: € 196,259.05.
These TAES have been calculated under the assumption that there is no cancellation, either partial or total, over the entire duration of the loan and may vary depending on the amount and term. The Annual Equivalent Rate (APR) does not include the expenses that the client / borrower would have to pay for the breach of any of its obligations under the contract or those that are borne by the Borrower in the acquisition of goods and services. The granting of the mortgage is subject to the approval of the request by Bankinter, SA The amount of the loan can not be more than 80% of the lesser of the two values: purchase value or appraised value of the home, and even 60% in second homes. In the event that the Client fails to comply with its obligations to the Bank, In addition to being able to lose the home, the responsibility of this and the rest of the intervening parties of the operation, will be extended to all present and future assets. Offer valid until October 10, 2018 or until the amount offered is reached (€ 25 million).