late payment between mortgages It remains under control despite the brutal rise in Euribor caused by the increase in the European Central Bank’s official interest rates (ECB) to combat high inflation. Don’t forget about loans to buy a house Bank of SpainIt is the last thing that citizens stop paying: they use savings and benefits and do not stop until they stop paying their contributions. last two years Because they experience, on average, a significant decrease in their income, they often job loss. This is why the defaults lower levels Far from maximum in historical comparison 6.28% compared to March 2014Although a slight increase from representing 2.33% of mortgage loan balances in March 2.44% in June. But this fact hides notable differences: low income households they have couple default rate richest families.
According to data from the Bank of Spain 20% of households with lower gross income (less than 26,695.09 euros per year) recorded a decline in mortgage defaults from 3.69% in December 2021 (when the ECB began tightening monetary policy). 3.27% since last June. But despite the decline, they still record a default rate twice that of the top 20% of households with the highest income (more than 40,775.85 euros per year), decreased from 1.99 percent to 1.99 percent 1.63%. So the data confirms what is intuitive: The lower the income, the greater the payment difficulties: 3.12% Late payments in households with annual income between 26,695.09 and 30,735.5 Euros, 2.86% between 30,735.5 and 34,728.27 euros, and 2.44% Between 34,728.27 and 40,775.85 euros.
Therefore, all family groups experienced a problem. increase in wages average monthly mortgage rates Between 19% and 21% From the end of 2021 until last June, 453 to 542 euros In case of lowest income 716 to 869 euros at the highest levels. However, the impact of these increases on family finances has been unequal depending on their economic level. Mortgage payments have so far covered 23.22% of the gross income of the lowest-income households in December 2021: 26.23% Last June, the increase in the wealthiest families was 17.14 percent. 19.66%. So this is confirmed richer house, more margin have to face the rest of your expenses after the mortgage is paid off.
Vulnerability indicators
The data also shows that mortgage payments weigh on the income of all household groups. below threshold Which one is taken into consideration? “cautious” (less than 30%). Bank of Spain could not detect “alarm signs” in a generalized way in this variable. But being average implies that: yes there are families mortgaged above at that level. And taking this into consideration low income households Those with the ratio closest to the barrier (26.23% compared to 30%) can be predicted to see an increase in this group as well. larger number families in financial situation most vulnerable and with higher risk of default.
Another indicator in the same direction: 40% of low-income households They just assume you’re close 11% of balance total mortgage lending due to their lower access to loans. lower savings level to pay the down payment (banks normally require the buyer to contribute 20% of the value of the property) as well as lower property prices enough to afford to buy. But their weight mortgage of approximately 11,000 million euros suspicious collection (No payment for more than 90 days or other subjective characteristics that make non-payment likely) 16%higher than would correspond to its weight in the total loan.
Increase in defaults
This is older financial weakness Makes low-income households more vulnerable “Some deterioration in credit quality is expected” (read, increase in defaults) predicted by the Bank of Spain. In the latest financial stability report, it was stated that “the economic situation showed a positive development”. labor market And economic activityA remarkable result was achieved with the decrease in inflation income recovery percent of households in the first half of the year.” This explains why mortgage delinquencies continue to decline. average balance rate since then the mortgage has already increased 1.1% From end of 2021 3.5% September, “an expected further transmission of the increase The ratio of interest rates to the household’s outstanding debt cost (reference), to increase of the rate houses debtor high financial burden“.
Therefore, the agency estimated it to be slightly less than one. one third of mortgages Variable interest still faces a problem reviewing your quota more than one percentile point (plus the difference determined in the contracts) by June 2023 June 2024. And he warned that a five percentage point increase in Euribor, which is fully transferred to loans (slightly higher than recorded since December 2021), could increase the number of loans. Indebted households are in a difficult situation (interest payment of more than 40% of income) represents 14.6% of the total (1.63 million families).