Mortgages in trouble. Some, to the limit of their possibilities. The rise in interest rates is increasingly complicating the economy for a multitude of families with variable rate loans. The Euribor has already accumulated 16 months on the rise, so that the credits that have to be reviewed according to this index are already suffering a more than 50% increase in their quotas. This circumstance is, for many, a heavy burden on their economy that adds to persistent inflation. This is the case of Arantxa GarcÃa, from Madrid, who sums up her situation with “no matter how good your salary is, it’s crazy.”
His problem is one more among thousands and thousands of families mortgaged at a variable rate in Spain. Some did it years ago and others have no choice but to do it now. At this time, the Euribor-referenced mortgages constituted on homes are three out of ten, according to data from the National Institute of Statistics.
Arantxa bought her home in 2008 and took out a variable mortgage of 220,000 euros with BBVA. Thirty years to pay it off. Until a month ago, his share was 570 euros. But in April she got “the rush”, as she says. 801 euros a month she has to settle now. “I’m sure there are going to be evictions because I can’t imagine how people can afford these upgrades.” She has savings and is starting to use them in anticipation of the referential going down in the medium term. She hopes that the interest rate hike will not continue for too many more months.
Daniel Gómez is in a similar situation. He bought a house in Valencia in 2010. It cost him 160,000 euros and he signed a mortgage with the old Popular for 200,000 euros to be paid in forty years. He affirms that, in addition, they forced him to take out life insurance. He now has a debt with Santander of 145,000 euros. Until December of last year he paid a monthly fee of 460 euros. That month, the receipt rose to 682, 50% more. “I’m trapped, paying my mortgage is unaffordable,” he says, already thinking about asking his relatives for timely help. And the worst will come in just half a year, when he has to review his credit. “How much will it take me? At 900 euros? I will have to sell the apartment, â€he laments.
Daniel has started a negotiation process with Santander. “I have called the bank and I have told them that I want to change to a fixed rate.” But he claims to have hit a wall at this point. “They have replied that, as there is a long time left for the review, they cannot make me an offer yet.” Until the end of the year, therefore, he only has to resign himself and do financial “juggling”, he says, to continue paying his dues. Holidays this year? “There will not be”.
There are more dramatic cases. There are families that are still affected by the previous real estate crisis and that are now being hit again by the current one. This is the case of Alberto Guzmán, from Toledo, with two variable-rate mortgages, one for his main home and the other inherited from his father. For the first, contracted in 2007 with the old Caja Madrid, which later passed to Bankia and is now managed by CaixaBank, he pays 518 euros each month. He has already spoken with his office and they have informed him that he will pay more than 800 euros in July, when he has to update his loan. For the second, with Bankinter, he already pays 500 euros, when a year ago he paid 340 euros. “We are suffocated,” he says. Having to pay 1,300 euros every month causes him “anxiety”. He recounts that his practically daily goal is not to accumulate three unpaid full receipts, something that he is achieving with the help of friends who lend him money: “With three unpaid bills, he would go to legal services.”
Financial institutions are offering clients a gateway to convert their fixed mortgages into variable ones. The problem is that this operation entails extra expenses for families. “It would be too expensive for me,” says Alberto. His horizon: “Let’s see if the bloody war in Ukraine ends. I used to be affluent middle class and I have had my power cut off â€, he explains with resignation.
Faced with this problem, the Government is studying additional measures to strengthen the code of good practice, to which only 9,000 mortgaged people in distress have subscribed. The Ministry of Economy plans to convene a meeting to review this mechanism with representatives of the banks in the coming days and, if necessary, reinforce it. United We Can, for its part, has proposed doubling the tax on banks and allocating a part to those with mortgages. He also wants variable-rate mortgages to be able to become fixed at no cost to the citizen. It is a solution that the PP also defends. The coalition government is preparing a new anti-inflation decree for the end of June where, in addition to measures to contain food prices, solutions could be included for variable-rate mortgages.
