Openbank vs La Caixa: a 6,000-euro gap between two Spanish mortgages
Openbank and La Caixa in Spain offer the same fixed 2.20% rate, but 5,000-6,000 euros in interest and insurance separate the two 30-year mortgages.
English · Original discussion in Spanish · Published
Openbank vs La Caixa: a 6,000-euro gap between two Spanish mortgages
How much is it worth having a branch you almost never visit? That is the question anyone comparing a 30-year fixed mortgage between Openbank and La Caixa asks themselves, and the answer has a price: between 5,000 and 6,000 euros in interest over the life of the loan, according to the applicant's own calculations. Both banks offer the same fixed rate of 2.20%, but with very different conditions for bundling products.
Openbank offers 2.20% with direct deposit of your salary, home insurance at 0.10% and life insurance at 0.10%, with no obligation to take them out with the bank. La Caixa requires four years of life and home insurance taken out with the bank itself, at rates of 0.35% and 0.15% respectively. The difference, according to the applicant's own calculations, is around 5,000-6,000 euros in favour of the online bank.
The real cost of tied-in insurance
The saving is not only measured in the rate. The life insurance La Caixa imposes works out at around 37 euros a month with half the capital insured, according to the person affected, and premiums rise with age upon renewal. For a single applicant with no family dependants, that outlay is not worth it. Bank home insurance, moreover, is usually more expensive than a policy taken out elsewhere, according to the experience of several participants.
Some argue that life insurance is a protection everyone should have and that, since the bank is paying itself, it will not reject its own payout. The argument falls apart when the policyholder has no dependants: the insured capital protects no one.
The physical branch and parental oversight
The deciding factor is not financial. The applicant values having a branch to go to if a problem arises, though he admits he rarely visits. And the family factor weighs even more: his parents are going to help him with a gift of money, and his father, old-school, wants to keep monitoring the movements through his passbook and the La Caixa ATM.
The most common solution does not require choosing. You can sign the mortgage with Openbank and keep the La Caixa account for everyday use: the father deposits as always into his bank and the son transfers it afterwards. It takes a minute.
The problem of the salary deposit and account fees
Staying with La Caixa without having your salary paid in carries an extra cost: around 90 euros per quarter or four-month period in maintenance fees, according to the person affected. In other words, the convenience of the branch is paid for twice: in interest and in fees.
The full calculation, broken down item by item across interest, premiums and fees, reveals a difference that surprises anyone who only looks at the nominal rate.
In the end, it is the usual decision: pay 6,000 euros for peace of mind you use three times a year, or explain to dad that the passbook no longer exists. Good luck with the second option.
How much is it worth having a branch you almost never visit? That is the question anyone comparing a 30-year fixed mortgage between Openbank and La Caixa asks themselves, and the answer has a price: between 5,000 and 6,000 euros in interest over the life of the loan, according to the applicant's own calculations. Both banks offer the same fixed rate of 2.20%, but with very different conditions for bundling products.
Openbank offers 2.20% with direct deposit of your salary, home insurance at 0.10% and life insurance at 0.10%, with no obligation to take them out with the bank. La Caixa requires four years of life and home insurance taken out with the bank itself, at rates of 0.35% and 0.15% respectively. The difference, according to the applicant's own calculations, is around 5,000-6,000 euros in favour of the online bank.
The real cost of tied-in insurance
The saving is not only measured in the rate. The life insurance La Caixa imposes works out at around 37 euros a month with half the capital insured, according to the person affected, and premiums rise with age upon renewal. For a single applicant with no family dependants, that outlay is not worth it. Bank home insurance, moreover, is usually more expensive than a policy taken out elsewhere, according to the experience of several participants.
Some argue that life insurance is a protection everyone should have and that, since the bank is paying itself, it will not reject its own payout. The argument falls apart when the policyholder has no dependants: the insured capital protects no one.
The physical branch and parental oversight
The deciding factor is not financial. The applicant values having a branch to go to if a problem arises, though he admits he rarely visits. And the family factor weighs even more: his parents are going to help him with a gift of money, and his father, old-school, wants to keep monitoring the movements through his passbook and the La Caixa ATM.
The most common solution does not require choosing. You can sign the mortgage with Openbank and keep the La Caixa account for everyday use: the father deposits as always into his bank and the son transfers it afterwards. It takes a minute.
The problem of the salary deposit and account fees
Staying with La Caixa without having your salary paid in carries an extra cost: around 90 euros per quarter or four-month period in maintenance fees, according to the person affected. In other words, the convenience of the branch is paid for twice: in interest and in fees.
The full calculation, broken down item by item across interest, premiums and fees, reveals a difference that surprises anyone who only looks at the nominal rate.
In the end, it is the usual decision: pay 6,000 euros for peace of mind you use three times a year, or explain to dad that the passbook no longer exists. Good luck with the second option.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (26 replies).
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