Abanca restructures its mortgage offer and reduces the fixed and variable ones

2023-12-18 07:11:38

Abanca gives a twist to its mortgage offer and reduces its loans for home acquisition, both at fixed and variable rates in a movement that is in favor of the market with the drop in the Euribor that has occurred in recent weeks.

Thus, and according to the information that appears on the financial institution’s website, Abanca has reduced the cost applied to its fixed-rate mortgages, nicknamed the Fija Mari Carmen, by seven tenths in recent days. Specifically, this product for home acquisition that does not vary the amount of the monthly installments throughout the life of the loan goes from the 3.85% TIN (5.74% APR) that it had in November to 3.15% TIN (5.05% APR) for fifteen years that now marks after applying the maximum bonuses. And the entity headed by Juan Carlos Escotet reduces the cost of mortgages by up to one percentage point by taking out life insurance, home insurance, and using a credit card at least 24 times a year, payroll domiciliation, among others.

Reduction in the price of Abanca mortgages

If these bonuses are not applied, the TIN of the Mari Carmen fixed mortgage goes to 4.15% TIN (4.77% APR).

In the case of the variable mortgage, as can be seen in the attached table, the changes go from two different sides: on the one hand, the cost of the first year of the loan’s life goes from 2.50% TIN to 1.40% TIN. During the rest of the life of the loan, the differential over Euribor that applies increases from 0.75% to 0.6%. In both cases these figures refer to the maximum bonus offered by the entity. In both cases, the entity covers a maximum of 80% of the price of the home or the appraisal value.

The Euribor, down

This movement occurs at a time when the Euribor, the main mortgage benchmark index, has been declining for several weeks due to expectations of a step back in interest rates that loom over Europe ahead of 2024. With Against this background, there have been several entities that have begun to adjust their mortgage loans downwards, but none had taken a step as relevant as that of Abanca this week.

In this sense, last Friday the 12-month Euribor registered a new decrease in its daily data, standing at 3.644%. It is the first time since April that this indicator falls below 3.7%. If we look at the monthly average, to date and so far in December, it would be at 3.753%, marking the lowest level since March. If this pattern continues until the end of the month, the annual variation of the Euribor would be 73.5 basis points. This increase would be the most moderate since April 2022, since interest rates, which experienced a significant increase, generated year-on-year increases in the Euribor of more than 350 basis points for several months.

The ‘war’ is brewing

This step forward by Abanca will be, according to different sources in the sector, one of the first of many that will come from the beginning of next year. After 2023 focused on restructuring the remuneration of liabilities due to the years of low and even negative interest rates, the year 2024 is emerging as the period of return of the mortgage war. In recent months, the rapid increase in interest rates and the maintenance of housing prices caused a sharp slowdown in the granting of mortgages, with double-digit falls in the year-on-year comparison.

However, last October, the trend changed abruptly, according to data from the Bank of Spain, as the decline in mortgage signing stopped dead. Financial institutions unfrozen their mortgage offers after the summer months, anticipating what is expected to be the next battle, the mortgage war.