2022 undoubtedly left its mark on a before and after in the mortgage market. While the year started almost as it ended in 2021, Euribor recorded the highest annual increase in its history in these twelve months, and is already at its levels 14 years ago: from -0.477% in January to 2.884% in December, In his absence, ten days until the end of the month and year. We have not seen similar figures since December 2008.
This affects new mortgage holders, but especially those who already have a variable rate loan and whose monthly mortgage payments are rising. What drove the rise in Euribor and the rise in mortgage prices? Comparator and mortgage director, iAhorro, Simone Colombelli, open: “The European Central Bank (ECB) remotely controls Euribor.” How? “Euribor is very sensitive to what is going on in society; The macroeconomic environment greatly influences this indicator, and the war between Russia and Ukraine has led to a precisely chaotic macroeconomic situation”.
As a result of this situation; electricity, gas, oil and even raw material prices suddenly went up. In January 2022, inflation was at 6.1%, rose to 7.6% in February and remained so until reaching a peak of 10.8% in July. At this very moment, the European Central Bank began to take measures to prevent further inflation. The stellar measure was to raise the interest rates, which have been in effect for the seven years since March 2016, to 0%.
From July to December, the ECB eurozone increased interest rates four times: in July, in September, in October, and just a week ago in December. Thus, interest rates are already at 2.5%, which, albeit very slowly, helped inflation fall to 6.8% in November, but this has greatly affected mortgage lending.
Almost 40% of iAhorro users have signed a mortgage amendment
To mitigate increases in mortgage payments for those who already have variable mortgages, more and more people are choosing to change their bank loan in order to pay better terms and less interest. “Since the beginning of the yearSuccession request of users coming to iAhorro doubled”, confirms Simone Colombelli, Mortgages director of mortgage comparator. Specifically, according to data collected by iAhorro, 17.39% of users who came to the mortgage comparison tool in January signed a mortgage amendment; this rate was already around 30% in August.
When evaluating this data, it is necessary to take into account that about three months have passed from the beginning of the process to the signing, so if we talk about the change request, we can see the turning point in May. “In April, Euribor returned to positive terrain after seven years of negativity.. From there, that was when we really saw a change in the trend in mortgage change demand, specifically from variable to fixed. As for the signatures, we started to see the turning point three months later, in August, the time between the submission of the petition and the signing of the amendment,” says Simone Colombelli. Similarly, 39.96% of the mortgage remediation signatures filed by the mortgage comparator in November began to be processed in September.
New mortgages, more expensive and less flat rate offer
With this increase in interest rates, the bankdiverting all supply and demand to variable mortgagesThe Mortgages director at iAhorro confirms that this is why fixed mortgages are getting more and more expensive to “make them less attractive.”
In fact, the average fixed interest rate signed by the users of the housing loan comparison tool was already above 2% with 2.13% in November, the last month for which all data are available, and the average of the variable rates decreased to 0.52%. Then, the difference between one species and another is 1.61 percentage pointsThis is the highest level since iAhorro has recorded data on this subject.
So whoever is considering getting a fixed mortgage this month or in 2023 will make it more and more complicated: “Banks are increasingly reluctant to offer the fixed product to users. and if they do, interest rates in most cases already exceed 3%”, explains Simone Colombelli. But this expert adds that there are other options for these users: “The hybrid mortgage has positioned itself as an even more attractive product this past quarter than the fixed one.”
One in four users who sign their mortgages through iAhorro already opt for a hybrid mortgage. And it is he who does not find the good. 100% fixed mortgagebut she doesn’t want to go variableif you hire someone mixedIt has a fixed initial period, during which you can be sure to always pay the same installment, and you can change the terms of your mortgage when the variable slice arrives.