this homemade, lending rates of banks to each other, from -0.5% at the beginning of the year to 2.8% in November. This value is very important because almost all variable mortgages it is referenced. On a loan with 100,000 euros remaining, this means going from paying negative interest of 500 euros per year to 2,800 euros, which means an increase in loan installments by 230 per month. This makes monthly payments very aggressively more expensive. Despite the rapid rise in the first eight months of the year, Fixed around 2.5% – 3%until the European Central Bank decides whether to raise interest rates further. This slowdown in rise allows us to analyze the direct results of the previous edition.
It’s traditionally debated whether it’s more useful on the streets. buy or rent an apartment. There is never a definitive answer because it largely depends on the person’s economic, family or work situation. From a financial point of view, purchasing allows to create a legacy that rent does notbut the latter allows for greater freedom or mobility.
But what is more expensive each month? To rent or to buy? According to the latest report Living Feature TelescopePrepared by EY consulting firm, “Buying a house is worth it for most Spaniards as long as 20% of the first payment is collected face to face”. Javier García-Mateo, partner responsible for Strategy and Real Estate Operations, believes that “if Euribor does not continue to rise, rent prices in Spain should fall by at least 11% so that demand for one to three bedroom homes will favor renting instead”.
Another source, in this case valuation expert UVE Valoraciones, when The mortgage payment is less than 15% different from the rent, it would be more interesting to rent. This figure has been reached in some of the main Spanish cities such as Barcelona, Palma de Mallorca or A Coruña. “Although the comparison of mortgage payments and rents is advantageous for buying a house, it should not be forgotten that; The biggest obstacle for first-time buyers is the need to save 28% – 32%. from the purchase price of the house. This is why the report, published today, advocates for alternative measures to regulate rent based on facilitating purchases through State guarantees, which is the biggest obstacle for young people and allows financing for more than 80 percent of the purchase price.
ARTICLE, “the increase in rental prices The short-term observed in the last five years Due to the worsening of the economic situation in Spain and the greater effort undertaken by households as a result of the impact of high inflation on shopping carts”. It is normally assumed that the effort rate should not exceed 35%, ie the percentage of income used to pay rent or mortgage.
Creating a legacy
Sergio Espadero, head of the consulting and valuation division of the Tecnitasa appraiser, believes that “there is no more interesting option than the other” and that each “depends on the lifestyle”. “If you look at it from a financial and investment perspective, you make a mortgage payment and when you run out of the loan you have a house that you can theoretically sell and get back more than you invested. If we look at historical price. Evolution, 10 or 30 years ago, revaluation is 100%. It is a medium-term investment and investing in housing is always like that.. You cannot compare the rental price with the mortgage because you only see part of it and it is not an investment project in the short term,” he says.
Since the Civil War, Spain has been a land of owners. According to Eurostat’s 2020 data, only 25% of the population currently lives in a rented house. “The owner-owned rental life model in Spain is very limited. this living place like our retirement planis the way to get a pension for middle-class and lower-middle-class families. Can someone get rid of their home because the mortgage payment has increased by 300 euros? There will be people who won’t accept this, but I personally believe that this is not a generalization”, explains Espadero.
by region
According to the UVE Valoraciones report, It costs the same to rent and pay a mortgage in Madrid, 15.82 euros and 16.20 euros per square meter per month, respectively. But not so in other major cities in the country: mortgages are 14% lower in Barcelona, 37.5% lower in Valencia and 20.5% lower in Seville. “Of the 20 municipalities with the largest populations, only Barcelona and Alicante have the quota/rent ratio improved in favor of quotas, and this is because rents have increased so much,” the study concluded.
The number of municipalities where fees constitute more than 75% of the rent is 71. Constituting 64% of the total as of November 2022; In November 2021 there was only 28.26% of the total. Specifically, the places where the mortgage cost is higher than the rent each month are San Sebastián, Getxo, Alcobendas, Palma de Mallorca, Sant Cugat del Vallés, Pozuelo de Alarcón, Marbella, Majadahonda, A Coruña, Rivas-Vaciamadrid and Pamplona. “It’s probably better to rent than buy in the municipalities on this list, but each case needs to be looked at individually. What is certain is that the increase in fees was much higher than last year’s rent increase.” They point from SVU.