Mortgages for the purchase of housing become more expensive due to the aggressive monetary policy. /
The unions ask the Government for a rescue fund for mortgagees worth 650 million euros financed by the banking tax
The rise in prices continues to put pressure on consumers’ pockets and is not an exclusive situation in Spain. Inflation in the euro zone reached a record figure of 9.1% in August, two tenths more than in July, according to Eurostat published yesterday. At the same time, in another indicator known yesterday, the Euribor threatens to exceed 2% this month due to the fight of the European Central Bank (ECB) against inflation through the rise in interest rates.
In this context, with an average of 2% in the Euribor, the average mortgage of a Gipuzkoan would become more expensive by 183 euros per month (or 2,196 euros per year). The calculation is made taking as a reference in Gipuzkoa a mortgage of 150,000 euros over 30 years. It should be remembered that the final amount will always depend on the credit review schedule and the differential (in this case we have applied Euribor +1%) that each citizen has committed to their bank, as well as the type of credit (fixed or variable).
THE NUMBERS
183 euros
Monthly figure by which mortgages in Gipuzkoa can become more expensive on average, taking a loan of 150,000 euros over 30 years as a reference. Per year it would be 2,196 euros with a 2% Euribor and always depending on the review schedule and the spread (+1%).9,1%
Inflation rate in the euro zone, which reached a record figure of 9.1% in August, two tenths more than in July, according to Eurostat published yesterday. The rise in prices continues to put pressure on consumers’ pockets and is not an exclusive situation in Spain.
Core inflation in the European Union, which excludes food and energy and is therefore considered the most persistent, also reached a record 4.3%, three tenths more than in July. This data is precisely what most worries the European Central Bank (ECB), which also remains several steps behind the US Federal Reserve (Fed) in the pace of tightening monetary policy. At its last meeting, the agency surprised with a record rise of 75 basis points in interest rates. And after the latest known data, many voices already point to an equal movement in October, despite the fact that it may hinder the economic recovery.
The market has been anticipating this scenario for a long time, as evidenced by the evolution of indicators such as the 12-month Euribor, which in recent days has regained momentum, yesterday placing its daily price at 2.263%. Just a week ago it was at 1.903%. And at the beginning of the year it was still trading negative, at -0.5%. Conclusion? The Euribor returns to 2009 levels and mortgage holders must face the highest cost of their loans in recent decades. And everything indicates that this will continue from now to the end of the year, in the heat of a monetary policy of the central banks that seems increasingly aggressive.
If the eleven business sessions in September are taken into account, the monthly average remains at 2.016%. And everything indicates that the month will end above that 2% barrier, a level that has not been seen (on monthly average) since December 2011 and that far exceeds the 1.249% of last August. The blow to mortgage holders who now have to review their installments compared to a year ago will be brutal. A situation that can completely disrupt the budget of many families -especially those with lower incomes- and that, incidentally, threatens to destroy the firm control of delinquency that the bank has managed to maintain during the last years of the pandemic, thanks also to the measures adopted by the Government to protect homes and businesses from the blow of the crisis.
a rescue plan
In this scenario, the unions have begun to press for the creation of a fund to help mortgage holders who cannot afford their loan. UGT yesterday presented its proposal, which would affect people with total income below the average salary in Spain or those considered vulnerable.
These groups would have to demonstrate that the monthly mortgage payment on their habitual residence exceeds 30% of their monthly income. Only then will they be able to access a benefit that would last 12 months.
The union estimates that some 340,000 mortgages could benefit from a fund that would have to be endowed with some 650 million euros to meet its objectives. How would it be financed? For the union, the ideal would be to use part of the 1,500 million euros that the Executive expects to collect per year with the new banking tax.