The news for home buyers remains challenging. End ECB rate hikes. They raised rates again to curb inflation. Euribor rose to 3.534% in February, marking yet another month of increases. This shift pushes up monthly payments for many with variable-rate loans, putting families under pressure and generating more inquiries to consumer-law firms.
In the province, where the average mortgage issued last year according to INE stood at 105,000 euros, the current Euribor level of 3.534% as of December is up from -0.502% seen in December 2021. This change lifts the monthly payment from about 375 euros to nearly 590 euros for those awaiting reviews in the coming weeks. The gap reaches 214 euros per month, more than 2,575 euros per year, compounding the impact of rising prices for homes, energy, and other essentials on many households.
Nevertheless, there is reason to believe this ascent may not be finished. The Financial Users Association projects the indicator at around 4% by next summer, with some sources hinting at even higher levels before cooling off.
The Bank of Spain has reported a December Euribor near 3.54%, one of the lowest points in the historical series, while those managing Spain’s main units have sought to minimize the impact of the rise in recent weeks. Law firms have nonetheless seen a noticeable uptick in inquiries as citizens express concern about bills and mortgage terms. Carlos Zarco, head of Alicante’s consumer-law division, notes that many requests target possibilities under U.S. practices and the Second Chance Law, though practical eligibility remains uneven and often limited.
How many people from Alicante will benefit from mortgage assistance measures?
The challenge is that many do not meet the required criteria. The government-promoted program outlines deferrals or extensions to ease the burden, yet it does not fully relieve payments, leaving many to see it as a temporary fix without long-term relief, explains Zarco. Under the Second Chance Law, protection is contingent on residence and specific circumstances, which does not make it a broad solution either.
Experts say that increases in foreclosures and liens, if they occur, are tied to the Mortgage Act of 2019, which broadens the window before the bank can initiate mortgage enforcement. The period deemed typical for action has shifted from about 12 to 15 months depending on the loan, suggesting the biggest effects of Euribor’s rise might not be visible until 2024.
new lending trends
The market development shows that last year banking institutions issued 26,110 new mortgages in Alicante, with 19,499 financing a home purchase, a 9.4% rise from the previous year. The total financed amount reached 2,815 million euros, of which 2,059 million went to housing purchases. The average loan amount rose from 102,540 to 105,636 euros. With higher interest rates, a reduction in these figures is expected, yet a sense of urgency persists as some buyers try to lock in deals before further increases take hold.
Regarding loan types, the College of Registrars notes that 60.9% of mortgages in the Valencian Community were fixed-rate last year, compared with 39.1% variable-rate, suggesting a shift towards stability for many borrowers. The total number of mortgaged households in Alicante exceeds 209,000. Up to recently, the prevailing formula was Euribor plus a differential, a dynamic that may continue to influence borrowing costs as rates evolve.