In February 2023 (last month with full figures) amortized balance increased by 48% on mortgage loans living place inside SpainCompared to February 2022, since it began to depreciate at that time total 4.878 million This year it increased to 7 billion 200 million euros.
These are the results of this increase in the balance collected and amortized by the iAhorro mortgage comparator. growth euriborReturning to positive territory in April 2022 after six years and two months after pointing to negative values, it is already close to 4%.
Accumulated outstanding balance on mortgage loans decreased by 1.26%
To obtain depreciation data, first look at this data Bank of Spain contributes every month Regarding the accumulated balance in housing loans in our country: As of July 2022 outstanding balance peaked It fell from 519,129 million euros in the last two years to 508,477 million euros in February 2023. This outstanding balance reflects both new mortgages signed and total (cancellations) or partial mortgage depreciation.
We must also take into account the outstanding balance created each month. new hires For example, according to data published by the National Institute of Statistics (INE), 5,148,527 million euros were added in February 2023, with an additional 5,340,250 million euros added in January. And looking back, we see that this data is similar to the data recorded in July 2022 (5,260,008 million), for example.
In this way, although the balance created by new hires has followed the same trend for years, Accumulated outstanding balance decreases due to depreciation. So, if we add the outstanding balance in February of the same year (5,148,527 million) to the accumulated balance in January 2023 (€510.499 million), this will give us a total accumulated balance of €515.647 million in February. However, the Bank of Spain had a Accumulated balance of 508,447 million euros, up to 7,200,527 million less. Therefore, we can say that these amounts, which exceed 7 billion, correspond to the sum of the repayments made in the second month of 2023.
Is now a good time to pay off the mortgage?
Simone Colombelli, director of iAhorro Mortgages, said: “Euribor is the cost a bank pays when another bank lends it money. For this reason, It will always be better to pay back when our money is more valuable to the bank, that is, when the Euribor is high.”. Therefore, Colombelli adds, “now is the perfect time for any mortgage holder to pay off the mortgage partially or fully (to finish paying off) because they will save more on interest payments than they will save.” Euribor is falling”.
For example, we see this if we decide to repay 10,000 Euros in this month of May (only four years) on a variable mortgage of 150,000 Euros with a contracted May 2019, 0.99% + Euribor spread and 30 years payback. After contract), with current Euribor data (3,808%) we can save up to 7,827.46 Euros in interest if you choose to reduce the fee, and up to 23,369.58 Euros if you choose the maturity discount (you finish the mortgage payment in three years and six months) than originally agreed before).
If 10,000 euros were also amortized four years after concluding the same mortgage, but with Euribor 0.287% (data shown by this indicator in May 2022), the interest savings would have been much less: by reducing the fee to 1,822.16 euros and by reducing the term of payment ( two years and three months ago) 3,899.99 euros.
The sooner you pay, the better.
Yes that is right The most important thing to be able to pay back is to save money. and once we have it, we must also know how to choose the right moment to repay the mortgage. In this sense, Colombelli advises, “always amortize it in the early years of the mortgage if we have money saved and we don’t wait.” Reason? “The depreciation system we use in Spain is the French depreciation system. In the first years of the mortgage loan, more interest is paid than the principal. At the end of the mortgage term, this situation is reversed: more principal is paid than interest,” adds the director of iAhorro Mortgages.
Additionally, again due to the French depreciation system, as we saw in the previous examples, the amount of interest a person can save by reducing their depreciated mortgage years is much greater than if they choose to lower the fee paid for each. month is more comfortable.