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How much does it really cost to take out a mortgage?

Nowadays, applying for a mortgage is a common task. But there are many details to take into account before applying for a mortgage, in order to know the total cost.

In this article we will talk about how the costs of a mortgage are calculated, an example of a real case of a mortgage and its total cost, how to reduce costs when applying for a mortgage, how to collect information and what you should know before choosing a mortgage.

How is the price of a mortgage calculated?

The mortgage is calculated based on the amount borrowed, the annual interest rate, the time the borrower needs to repay the loan and the additional fees charged by the lender.


For example, suppose person A borrows €200,000 to buy a house. He has a down payment of €20,000. The lender agrees to lend the money with a fixed interest rate of 3.5% and a duration of 25 years. The total cost of the mortgaged property would be €310,950 which would break down as follows:

  • House price: 200,000 €.

  • Taxes and expenses of the purchase (notary, registration, agency and taxes): 13.725 €.

  • Mortgage interest: 97.225 €.

That is to say, why the bank will lend us with these conditions 193.725 €, which added to the 20.000 € contributed, would allow us to buy the property, we would pay interests of 97.225 €.

We leave you a link where you can calculate your mortgage and the amount that you will have to pay each month: Link idealista mortgage calculator

How to reduce costs when applying for a mortgage

One of the most effective ways to reduce costs when applying for a mortgage is to shop around for the loan offer with the best interest rate for your needs. This means comparing interest rates, additional fees, repayment terms and other offers. Another way to reduce mortgage costs is to reduce the initial loan amount, which will help reduce the overall cost of the mortgage. In addition, you can also make sure that the lender offers discounts for an installment down payment or for paying an additional amount of principal due over the course of the mortgage.

How to gather information and what you should know before applying for a mortgage

It is important to gather the best possible information before applying for a mortgage. This means making sure you know the terms and conditions of the loan, the interest rate, additional charges and any other information related to the mortgage.

In addition, you should also check the reputation of the lender. This includes reading reviews from other borrowers, searching online for any information related to the lender and talking to an expert before deciding on a loan.

A list of key questions to ask before taking out a mortgage

1. What are the additional charges?

2. What is the interest rate?

3. When will I have to start repaying the loan?

4. When will I finish repaying the loan?

5. What will be done if there are late payments?

6. Does the mortgage have a prepayment clause?


Taking out a mortgage is a crucial decision and should be made with great caution. Once you have all the necessary information, start asking around and compare offers to find the one that offers you the best conditions. With information and the answers to these questions, you will be able to determine which mortgage is the best option for your financial situation.


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