How will 2023 be for mortgagees?

This euriborOne in 2022, which the vast majority of variable rate mortgages in Spain are linked, measures the average rate that banks take from each other to lend money. unprecedented climb The index thus moved in historic lows (-0.502%) in December of last year, rising at an average of 2.828% by the end of November, and in the last few days over 3% For the first time since late 2008. The European Central Bank (ECB), whose movements are trying to predict Euribor, stated that it predicted a few days ago. keep raising rates (it’s already brought them to 2.5% without increasing 11 years later), it’s more than predictable that mortgage reference will continue to rise with this. For example, Bankinter’s research service raised its Euribor forecast for December 2024 to 4%.

Mortgage payments increase all year, and between November and the middle of next year, they will rise higher. Although there are variable rate home purchase loans that are reviewed every six months, most do so once a year. The installments increase if the Euribor is higher than the previous year in the reference month for reviewing the loan. The reason why the biggest increases will start in October and increase rapidly from November is because Euribor, normally two months ago, is used as a reference. As of last November, investigations will be carried out at a rate that will touch or exceed 3% (plus the difference signed on the date the loan is concluded). very strong increases that will last about a year. The largest increases will be concentrated in the first half of next fiscal year.

The current level of Euribor means a mortgage of €150,000 over 24 years at an expense ratio of Euribor plus 1%. A monthly fee of 552 euros to pay 843, ie 291 euros per month and 3,492 euros per year more. For a 300,000 Euro loan with the same features, the increase will increase from 1,105 Euros to 1,686 Euros: 581 Euros per month and 6,972 Euros more per year.

first thing to do to go bank and try to bargain. Businesses are often interested in doing this because they don’t want their clients to stop paying and have to hold on to the property because the process is expensive and their business isn’t real estate. Up to one million low-income families (up to €25,200 per year) and middle-income families (up to €29,400 per year), the State and organizations have agreed on a set of measures that the industry has committed to implement in lower rate capital payments such as freeze quotas, maturity extensions and grace periods.

The first thing you should ask yourself is if you have enough and usable savings to be able to evaluate it. Why do you want to amortize, because you can cut both the maturity of the loan (they pay less interest in the long run, but the monthly installment does not change) and the installment (the monthly installment is lower but paid for the same years). In the context of high inflation and the current high uncertainty, it may make sense lower the fee It’s also true that it would be necessary to have more monthly salary but to reduce the savings bank for this, which may not be a good idea in the current context. It’s always financially interesting to reduce the number of years remaining to pay, unless you have or foresee financial difficulties.

For years, and until last year, it was an attractive option to get a fixed-rate mortgage with fixed installments over the life of the loan. The low and negative rate monetary policy, which the European Central Bank encouraged to revive the euro economy, caused these loans to be offered for housing purchases at the lowest prices in history. With the rapid tightening in monetary policy, that golden age is over. Fixed rate mortgages are now much more expensive, although they always include an interest rate. interesting alternative for those with money and don’t want unpleasant surprises with installments like those currently suffering from variable rate mortgages.

There is never a definite answer to this question. The financial and life situation of each person and family varies greatly, and it is impossible to make recipes that apply to everyone. Generally, Mortgage payments are lower than rents for homes with similar characteristics., although the gap has narrowed in the last 12 months. In addition, this is a somewhat misleading difference, as buyers bear other costs that tenants avoid, such as community fees, insurance or council taxes. It should also be taken into account that it is necessary to have it to buy. savings equal to about 30% of home value (Banks generally provide a maximum of 80% financing, plus 10% is required to cover the costs of purchasing and establishing loans). It is also important to note what experts recommend. wage does not exceed 35% of income relative. Currently, it is considered profitable to take against a lease when the monthly payment of the loan is 15% less than the market rent. This Cross-comparator is a good tool to determine whether it is more economically viable to buy or rent.