EDITING |
Mortgages are becoming more expensive, it is a fact. In less than a year we have seen how the Euribor has increased dramatically from negative values to values exceeding 2% with the prospect of closing September at 2.5%. The increase was expected but not the speed at which it is happening.
Most mortgages in Spain are variable, 75% of the population will be affected by the rise of the Euribor in the payment of their mortgages, paying up to €1300 more per year. The increase in mortgage payments brings concerns such as default due to the inability to meet the expense, which will vary depending on the year of mortgage contracting, being greater the more recent it is.
The unprecedented escalation is causing new homeowners to want to access a fixed-rate mortgage, with financial institutions increasing their requirements to grant them. Banks are lowering variable-rate mortgages to attract buyers and raising fixed rates to adapt them to the new prices of variables.
Other entities are betting on an aggressive launch of mixed mortgages to encourage fixed-rate payments in the first years and variable thereafter.
The Euribor will mean an increase in variable mortgages of more than €1000 annually putting many households in a compromised economic situation. The Euribor is the reference index that banks apply which indicates the average interest rate when lending money. The increase is considerable compared to the value from seven months ago.
For example, for a mortgage with an interest of Euribor + 1%, when updating the interest with the new value, it would go from -0.502+1=0.498% when the value was negative, to 2.2+1=3.2% having an increase of 2.70%. This increase can make mortgages more expensive by up to €2000. But the Euribor not only affects variable mortgages, as fixed interest has also increased in financial institutions.
