2023-08-18 17:38:13
The unusual rise in interest rates sponsored by the central banks to combat the inflation has caused a very strong increase in the mortgage payments in the last year and a half, which has led to families that they could afford it repay in advance part of their credits to reduce their debt and stop the coup. Of course, with relevant nuances. Early amortizations, thus, have focused on the variable mortgagesthose affected by the rise in the euriborbut they have also occurred in the fixed, despite the fact that their quotas do not vary. And the households with more incomeand therefore more available resources, have repaid early up to 1.6 times more than the less wealthy, according to data from the Bank of Spain.
Households allocated 12,000 million to early mortgage repayments in 2022
In between January 2022 and March 2023the families made early amortizations (greater than those required in their regular payments) equivalent to the 9.2% of the balance of variable mortgages existing at the end of 2021 and at the 6.4% of the portfolio of mortgages fixed rate. Households with an annual income greater than 47.199 eurosspecifically, they repaid earlier than expected the 11.7% and 7.3%, respectively. On the other hand, families with an annual income less than 30,596 euros paid in advance the 7.2% and 5.4%. In between were those with income between 30,596 and 35,066 euros (7,7% y 5,7%), 35,066 and 40,245 euros (8.3% and 5.8%) and 40,245 and 47,199 euros (9.4% and 6.3%). In other words, the higher the economic level, the greater the ability to allocate savings to repay the loan, as was foreseeable.
“He cost increase of variable rate mortgages increased the incentives to early amortization, which was seen reinforced by the fact that would hardly have increased the remuneration of some liquid assets, such as deposits“, explained the Bank of Spain itself in a recent report. in the environment of ultra low rates Prior to 2022, thus, financing was very cheap and made economic sense get into debt instead of saving. Starting last year, on the other hand, credit installments skyrocketed without deposit rates doing the same, so it made more sense to get out of debt. He average guy of the bank’s mortgage portfolio, thus, it went from 1.1% January 2022 to 2.13% in December and to 3.19% from last Junewhile the interest of the new deposits advanced from 0,06% al 0,72% y al 2,21%respectively.
Less fee or term
He faster pace of household repayments responds to the fact that repaying the mortgage early allows reduce quota (with what is paid less per month) or shorten the term maturity of the credit (with which less interest is paid in the long run). Consequently, as the Bank of Spain pointed out in its report, families have allocated a “increasing part, though reduced” of the extraordinary savings that they accumulated during the pandemic to repay the loans ahead of time: in an amount equivalent to 1.3% of their gross disposable income and increasingly from 2021 and, above all, 2022.
From the close of 2014Thus, households have amortized each quarter a average of 2.1% of your debt between regular and early payments. Last year, and mainly due to early amortizations, the pace accelerated from the 2.3% of the first quarter (some 11,500 million subscribers) until 3.2% of the last (16,090 million), a percentage that was repeated between January and March 2023 (16,100 million). In total, families spent last year about 54.700 million to amortize their mortgages, an amount greater than the new financing for the purchase of housing granted by the entities (some 54,000 million). Consequently, the mortgage portfolio from the bank began to shrink just a year ago. And at an increasing rate: in the second half of last year she went down in 3,838 millionwhile between January and March of this year it fell by 5,711 millionup to 493.705 million.
No commissions
Banks confirm this trend. “Many families with savings have went to their entities to ask them how much they needed pay off early of their mortgages so that quotas remained more or less the same despite the rises in the Euribor. In the big citieswhere the amount of credits is higher, they have basically been able to do so families with more savings and higher rents. But in the rest, let’s say that the size of Saragossa downis a process that could have been more generalized“, indicate financial sources.
The process has been aided by the agreement reached by the Ministry of Economy and banks last November so that customers do not have to pay commissions due to the early repayments of variable mortgages during 2023 (in fixed mortgages it is not legally possible unless it causes a loss to the bank, something that does not happen when interest rates have risen as is currently the case). change the mortgage variable rate to fixed rate it is also free This exercise.
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