During the last months, households have been coping with a significant increase in their mortgages derived from the increase in interest rates. The European Central Bank’s defense mechanism against inflation has a direct impact on the Euribor, the reference index for most mortgages in Spain, which has gone from 0% to 3.5% in a year. This means that requesting a loan in our country is increasingly expensive and that families with variable rate mortgages are experiencing increasingly inflated monthly payments.
At a time when the burden of mortgages more than 30% of the income is already eaten of the majority of families, Podemos has just presented a bill to protect homes: making the change from a variable to a fixed mortgage free of charge.
Measure. If there is an issue on which Podemos does not give up, that is housing: the instrument that it has used to put pressure on its PSOE partners for the last five years. Now, A bill has been filed with Congress so that customers of a variable mortgage can switch to another at a fixed rate free of charge. Actually, the mechanism has already existed since last year, after the entry into force of the Code of Good Practices to alleviate the rise in interest rates, but its duration was to be only one year. Podemos wants it to be permanent.
No commissions. In addition, the new law would also oblige banks to offer a free transition from a variable mortgage to a fixed one from another entity, which would bear the costs of the operation. That is, without commissions. “If the bank where the client had the variable mortgage presented a counteroffer to avoid the change to another entity, it would have to assume all the expenses of the operation,” explain party sources.
Because? For the purple formation, this is a measure with two benefits. On the one hand, it reduces the economic uncertainty of families, by not being able to face the rise in interest (which has gone from 0% in June 2022 to 3.5% in March 2023). And on the other, it gives stability to the banks, Reducing the risk of non-payment and delinquency. Basically, the objective is to loosen the pressure on families in a country where most mortgages depend on the Euribor and which have seen increases of more than 350 euros in their installments of the last months.
The actual situation. Right now, all those who are repaying a variable-rate mortgage loan, which are the majority in Spain (3.7 million) have been affected by the rise in the Euribor. Specifically, in February the increases in monthly payments reached 3,400 euros more on average. Figures that will continue to rise with further rises in interest rates. As we mentioned in this other Magnet articlein February, if we took as an example an average mortgage of 150,000 euros, at 25 years and with a Euribor interest of 3.425%, the installment went from €542 per month (with the index of -0.3% in February of last year ) at €827 per month.
And not only that. The current situation has led banks (with the aim of promoting variable mortgages, which are more profitable), to increase landline pricesthat they have become more expensive by more than 5% and they have become an almost impossible luxury to find.
Other measures to stop the escalation. It is not the first measure of this type that the purples promote. In September, when the global economic situation began to be felt in the pockets of the Spanish, proposed to force banks to offer customers the possibility of taking advantage of a reduction for one year of the variable rate to 0.1% (a ceiling) in order to offset the rise in the Euribor and “save families between 100 and 150 euros a month.” But the Treasury rejected it, arguing that it did not conform to the “legal framework” and that it could “have complications for fixed-rate users.”
Also in February of this year they claimed freeze mortgages, intervening in the market so that mortgage payments are at the levels of July 2022, before the ECB began to raise rates. Something that was also ruled out by the PSOE. Finally, it should be noted that the Government approved the Housing Law project more than a year ago to regulate rental prices and set limits on stressed areas. But the rule is still pending and blocked due to the disagreement between the parties. It is the never ending story.
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