The bank anticipates that less than half of the families that opt for the mortgage relief plan ends up accepting aid. Despite the fact that the Government announced that the package of measures agreed with the banking sector to mitigate the rise in interest rates on variable-rate mortgages could benefit more than one million customers, the estimates of the entities are much lower .
The financial sources consulted explain that the sector handles a wide fork which goes from 10% in a scenario of low acceptance to a maximum of 50% in the case of a large influx. As detailed, the actual volume of beneficiaries will depend on the number of customers who decide to join, so it is difficult to make a precise estimate. But in any case, the bank has that it will be between 140,000 and below 700,000.
Actually, even the lowest stage would already be a success. In this sense, the same sources recall that in the period between 2012 and 2021, the decade in which the first Code of Good Practices was in force, the number of households that received aid amounted to 62,000. And although one of the objectives of the Government with the improvement of the protocol and the creation of a new code is to reach more families, a flood of customers requesting these measures is not expected.
Industry analysts explain that the mortgage is usually the last expense that is left to pay. This is a characteristic of the Spanish market, since the majority of families choose to tighten their belts in other ways rather than stop paying the mortgage loan or restructure it.
In this sense, they also point out that the conditions of the economy have changed since the previous financial crisis that began in 2008. While in the past decade unemployment was one of the main obstacles to face the payments, now a drastic increase in the number of unemployed is not foreseen. And although from 2023 the conditions will be tougher due to the general price crisis and the continuous rise in interest rates, it is expected that customers will be able to face payments.
“We don’t expect there to be a large number of applications. In our opinion, most mortgagors could keep up with their monthly payments, even if their incomes were reduced. In fact, we believe that the cut in income will weigh more on consumption than on mortgage payments, ”he pointed out, along the same lines, S&P in a report released this week.
Disincentives
On the other hand, the same sources point out some disincentive elements to take advantage of the plan agreed by the Government and banks. On the one hand, they point out that relief measures may lead to increased interest: by applying extensions in the term of the loan, the life of the loan increases and the volume of total interest that the client ends up paying is higher. In this way, it is expected that many families will choose not to take advantage of the measures and maintain the payment of the fee.
They also point out that part of the customers who take advantage of the measures will be classified as doubtful credits or stage 3 (This happens when there is greater uncertainty about the ability to pay the loan), which implies entering lists of defaulters and is an obstacle when applying for a new loan from any other entity. Thus, in some of these cases it is expected that the measure may be dissuasive.
In any case, banks also rely on the very composition of the portfolios. In the last five years, which are the most worrying in terms of delinquency because most of the loan is pending repayment, the vast majority of mortgages have been formalized at a fixed rate, so customers will not experience an increase in share. And of the mortgages prior to that period, the amortization of the loans is advanced, which always supposes a greater incentive to continue with the payment and gives more security to the banks.