2023-07-17 07:28:57
Without precedents. The amortization of mortgage credit in the Basque Country does not have a record like that of the last year since the real estate crisis of 2008. Never had so much been paid to advance the repayment of these loans and thus escape the rise in the Euribor that, in only one year, it has multiplied by twelve to reach 4%. With their contributions, Basque families and companies have reduced by 4,356 million the amount of the outstanding balance of the set of loans with real estate security that are subscribed in Euskadi. The total amount is 80,431 million, the lowest for more than 15 years.
The rise in the reference index for variable mortgages, which in the Basque Country amount to just over 122,000, is causing increases in the fee that can exceed 350 euros per month on an average loan of 150,000 euros. A scenario in which, as sources from Laboral Kutxa point out to EL CORREO, “we have detected that amortizations have doubled.” It is the same phenomenon that is confirmed in Kutxabank, the entity with the highest market share -40%-. From the bank chaired by Antón Arriola they assure that “repayments are being maintained at a very important rate”, especially marked in the last months of last year and at the start of this 2023. Now it has slowed down a bit, but it maintains faster rates higher than last year.
Revenue
Amortization can generate safe returns of between 2.3% and 6% per year
In any case, according to the quarterly report of the Basque entity, the outstanding balance of its clients’ mortgages at March 31 fell by 5.14% compared to last year. They are 1,742 million fewer than a total of 32,172 and the largest decrease in more than six years.
From the offices in the Basque Country of Caixabank they also ratify the trend by stating that “we are at a level of extraordinary amortizations in the first quarter.”
Another factor that has facilitated this increase in extraordinary mortgage payments has been the accumulation of savings in checking accounts. Despite the erosion of the price hike, there was still a significant amount left after the restraint in spending caused by the pandemic restrictions. Some resources that, as long as financial institutions maintain their policy of not remunerating deposits, remain there as money on the mattress and find in these payments one of the best investments.
An example. If on a loan of 75,000 euros at 15 years, 12,000 are amortized on the installment, the annual return obtained is 2.3%, which reaches up to 6% if applied over the duration of the loan, shortening it to 11 years. These are gains that could only be matched by public debt, which has exceeded 3%, although less extended over time.
Homebuying
The slowdown in the mortgage firm, with a 20% drop in April, has already accumulated three months in negative
slowdown in mortgages
Another of the causes that has favored this decrease in the balance of credits has been the slowdown in the purchase of housing. The rise in interest rates has come to double the cost of mortgages and in a scenario with runaway prices, it is not the best incentive to buy houses. According to INE data, in April the housing loan firm plummeted 19.8%, in March 14% and in February 6%. A three-month negative trend that had not occurred since the 2008 crisis.
There are exceptions such as the data from Laboral Kutxa which, thanks to a strong offer for home purchase, has increased the granting of these credits by 40% up to May. But despite this jump, the result between what was lent and what was amortized has reduced the net balance of their mortgages by 1%, which shows the strength that this trend has gained.
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