The indicator is close to 4% of the daily rate, which will imply a strong price increase to 600 euros per month when reviewing variable mortgages
Confirmed. January’s ramp will get longer, and a lot, for those with variable rate mortgages. And also for future home buyers, who are also suffering from the unstoppable rise of the Euribor, with more expensive loans and much more demanding banks when it comes to providing financing to certain profiles.
The indicator most mortgages in Spain refer to ended February with a daily increase of another 45 thousandths, to 3.725%, showing that the dreaded 4% barrier is already more of a reality than a mere expert prediction.
After the new increase on the last day of the month, the average for February remains definitively at 3.524%, which practically means that those who took out a variable loan of EUR 150,000 over 30 years in February last year, at Euribor plus 0 99%, then you can see how your monthly amount goes from about 459 euros to about 750 euros. At least until the next revision, in February 2024. That is, the increase will be 291 euros per month, about 3,492 euros per year.
It should be borne in mind that the increase in Euribor does not affect everyone equally as it strongly depends on factors such as the amount already paid or the year they were taken out as it is at the beginning of the loan when the interest weighs more on total payments. That is, those who recently signed their mortgage are most affected.
According to calculations by the comparator iAhorro, “if we take out a mortgage with a higher amount, the costs will also be higher.” As an example, they give a loan of 300,000 euros with the same conditions as in the previous case, where the fee would become approximately 582 euros more expensive each month, ranging from 918.11 euros to 1,500.62 euros. Almost 7,000 euros more per year.
This complex environment has completely disrupted the budgets of families, who increasingly have to spend a larger part of their income on paying for their house, not to mention the impact of inflation on other expenses such as the shopping basket or electricity, water, gas or phone bills. “This rise in the Euribor will be a direct attack on the waterline of the domestic economies,” said Rafael Moral, head of the analysis department of the brokerage platform Hipoo.
The experts at CaixaBank Research calculate that Spanish households will have to spend 38% of their income on paying the mortgage alone. It is the highest percentage in the past 10 years. An effort four points higher than last year.
In this environment, more and more citizens are relying on requesting information for a mortgage change. According to the company, just over 40% of iAhorro users have already done so. And the comparison is tireless, even among those who are now looking for a home. Only the best profiles can get slightly cheaper loans. “For lower profiles, fixed and variable mortgages have skyrocketed and we are already at 4% in many entities,” the experts point out.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
