Belfius comes with a new type of living credit: the protected variable interest. According to the bank, the formula is unique in Belgium and meets the wishes of the customer.
According to Belfius, the customer will never pay more than agreed at the start of the contract, but can benefit from a lower humanity (fixed monthly amount) or a shorter term if the market interest rate would fall. “Our product therefore offers the best of both worlds,” says Pieter Falepin, head of Marketing and Sales Retail at Belfius.
Most banks already offer different formulas for the living credit, of which an important difference consists of the choice of a fixed interest rate or for a variable interest rate. The latter means that humanuality or duration of the credit can rise or fall depending on the evolution of market interest rate, albeit within predetermined limits.
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“We cannot predict what interest rates will do, but from a historical perspective, we know that interest can often and also strongly fluctuate,” explains Viviane Meynen, who came up with the new product. “The vast majority of our customers therefore opt for a fixed interest rate. But if the market interest rate starts to fall, that customer wants to benefit from it. He then tries to renegotiate his contract, but is not in a comfortable position. Moreover, such a refinancing also costs money. “
Higher rate than fixed interest
With the protected variable interest rate, the customer is certain that his humanity or duration will not rise, only can fall. Although he pays a slightly higher interest rate than that of the fixed interest rate, that difference will never be too big, because otherwise it is no longer interesting, Belfius emphasizes. A simulation of the bank (200,000 euros in 25 years) is a difference of 10 basic points. But that can fluctuate in the future, it still sounds.
The government bank does not want to say how many customers it hopes to attract for this new formula. “It is always the customer who decides,” says Falepin. “We hope to get bigger in the home loans market, which is a priority for us.” In recent years, Belfius has been increasing all its market share.