What is the Spread, and how can I reduce it?

The spread is the commercial margin set by the bank on top of the reference index in a mortgage. It forms part of the interest rate, but on its own it does not represent the total cost of the offer.

In some cases, the bank may reduce the spread if you take associated products such as insurance or salary domiciliation. Even so, it is worth comparing APR, MTIC, insurance and other fees to see whether the lower spread really pays off overall.

For example, one bank may show a lower spread but require more expensive insurance or other products that increase the total cost of the loan. Another offer with a slightly higher spread may still result in a lower overall cost.

This means that a lower spread does not automatically make an offer more advantageous, so it is essential to look at the total cost before deciding.

Talk to a specialist to understand whether a lower spread actually reduces the total cost of the loan.