Unicaja, Evo Banco and Kutxabank lower the rate of their variable mortgage to encourage demand

2023-07-19 06:55:52

The bank changes its mortgage strategy due to the rise in interest rates, makes the fixed mortgages and makes the variables more attractive. There are more and more banks that offer variable mortgages with differentials of less than 0.50% -the part that is added to the euribor to calculate the interest on the loan.

As explained to OKDIARIO from HelpMyCash, at least four entities offer mortgages with a differential below 0.5% plus Euribor: Unicaja, Kutxabank, EVO Banco and Cajasur. In addition, “we know that other banks can lower their interest rates to those levels if the client has a good profile and negotiates,” says Miquel Riera, the firm’s head of mortgages.

This is the result of a trend that began last year, when the Euribor began to tread positive ground and skyrocketed. Since then, “banks have reduced the spreads on their variable mortgages and have made the interest on their fixed mortgages more expensive,” says Riera. From the sector they explain that it is a tactic to encourage the signing of variable mortgages, with which they expect enter more now that this index is trading higher.

They make the fixed ones more expensive

Since the Euribor began its rise, fixed-rate mortgages have skyrocketed in Spain and, faced with this scenario, banks have begun to protect themselves by raising the rates of their loans. Specifically, large banks, such as Santander or Bankinterthey already offer fixed mortgages at an APR (Annual Equivalent Rate) above 5%despite the fact that the Euribor closed June at 4.007%.

According to data from the National Statistics Institute (INE), last April – the latest data available – the number of mortgages on homes slightly exceeded 27,050, which is 18.3% less than a year earlier. Of the total, 38.7% of the mortgages signed were at a variable rate and 61.3% at a fixed rate. While in April 2022 fixed mortgages represented 75.3% of the total (historical maximum), compared to 24.7% of variable loans. This increase in the demand for fixed-rate mortgages coincided with the rise in the Euribor and its entry into positive for the first time in more than six years, closing April 2022 at 0.013%.

Regarding the forecasts for the second half This year, HelpMyCash believes that the trend will continue to be the same: the Euribor will continue to rise slightly and banks will continue to make their fixed mortgages more expensive and lower the spread on their variable mortgages. Likewise, they will increase the initial fixed rate that variable mortgages usually have during the first months, as they have been doing since the middle of last year.

Euribor evolution

He euribor at 12 months it places its average in July at the 4,167%while in June it closed with a monthly rate of 4.007%, which meant exceeding this barrier for the first time since 2008.

This translates into that those mortgaged who have had to review their quota with the value of June, have suffered an increase in the price of more than 3,600 euros per year. Taking into account a mortgage of 180,000 euros, with a term of 25 years and an interest of Euribor plus 1%, if the loan is reviewed annually with said value, its monthly payment will go from about 745 euros to 1,052 euros. This means that the mortgaged person will pay 306 euros more per month and 3,672 euros more per year.

This is because in June of last year the Euribor stood at 0.852%, so until now an interest of 1.85% was applied to said mortgage and its monthly payment was about 745 euros. While now you will pay 5% interest (by adding the 1% differential) and your monthly fee will skyrocket to 1,052 euros.