Las mortgages They have become a very heavy slab for families due to the increase in the Euribor. The index to which variable-rate mortgages are referenced has gone from being at negative rates to getting closer and closer to 3%. The consequence is an average increase of around 200 euros in monthly payments, which is added to the general increase in the products in the shopping cart.
According to a study by Idealista, the mortgage payment represents an average of 23.5% of family income in Spain, but in some areas it represents much more: in Barcelona amounts to 49.7%, in Saint Sebastian to 46.8% and in Madrid al 41,3 %.
These data, the fact that the Euribor is rising and the complications added by the general increase in prices in other areas are what have led the Government and the banks to negotiate what measures can be put in place, something that they certainly do not understand who had one fixed rate mortgage.
Government and banks are talking about different possibilities. Among them are aid for the most vulnerable, alternatives for citizens of medium or low income and ideas to facilitate the transfer from variable to fixed mortgage.
As is known, the change from variable to fixed mortgage can be done in the entity itself (novation), transferring it to another (subrogation) or with a new mortgage. The main stumbling block in the case of novation is that the new offer has hardened. It remains to be seen if the Government and the banks agree on a maximum rate to help the families most affected by the rise in the Euribor that makes this option more attractive than that of subrogation or transfer of the mortgage to another bank.
The change of entity is usually more expensive. The mortgage law established that the new bank is responsible for paying the notary – between 0.2 and 0.5% of the outstanding amount of the subrogated loan – plus registration fees and agency fees. Unless the Government and the bank agree on an exception, the client will have to assume the appraisal of the mortgaged property and, what is possibly more onerous, the commission for subrogation that, if it is included in your mortgage, the bank from which you borrow will want to charge you. goes. This may be the most important bill. Its cost is regulated by law since June 2019. When it comes to a variable interest mortgage signed from then on, this cost will be 0.25% for the first three years or 0.15% in the first five years.
As regards aid to the most vulnerable, the reference to be able to benefit is the Code of Good Practices that was approved in the previous crisis, adapted to the current situation. The entities that assume it voluntarily are obliged to restructure the client’s debt (extend the term to reduce the installment or reduce the interest for a period of time, among other issues) or analyze whether they carry out write-offs or dation if the repayment is not guaranteed.
The possibility of taking refuge is not open to any citizen. The original Code already establishes a maximum household income that does not exceed three times the Iprem (Public Income Index for Multiple Effects, the benchmark for subsidies, aid, etc.). Taking into account that the annual Iprem stands today at 8,106.28 euros in fourteen payments, the limit would be multiplied by three: 24,318.84 euros. Pending whether or not this limit is maintained, it is debated whether the beneficiaries will be able to opt for this aid with a lower financial burden. Until now, the Code required that the financial burden exceed 50% of the household income, and now the limit could be lowered to 40%.
Whether or not the Code will be reformed remains to be seen. The bank advocates making a temporary addition to the original code. They point out that the situation should improve when inflation is reversed and that a temporary measure would avoid damaging the culture of payment.
In the case of low and medium incomes with a mortgage, solutions are being studied, such as banks freezing the dues for one year, make it possible to extend the term of the mortgages if they become more expensive by more than 30% and if they consume at least 40% of the family’s income, or facilitate the change to fixed-rate mortgage loans. By extending the term of the loan, the financial burden is immediately reduced. The measure would apply to variable-rate mortgages signed from 2012 for a first home.
The new mortgagees are among those who will suffer the most. The sector talks that around 25% of those who have a variable rate mortgage will be the most affected due to the intensity of the Euribor rise in recent times. While the Government and the bank study whether to help the mortgaged, the majority already opt for the fixed rate. In July, according to the most recent data, this type of mortgage exceeded 75% of the signatures, a figure that had not been seen until now.
Some have the question of how this battery of measures will affect the banks. Calvino He responded yesterday that “the billions of euros in benefits” that the banking sector has recently announced should make him realize that “you have to pitch in and help” the most affected families. It is a good way of making it clear that the Government is not going to do anything on its part, but it will look favorably on the votes that come to it thanks to this initiative.