Bank negotiates mortgage freeze to avoid impact of rise in Euribor

The banking sector welcomes the proposal announced by Caixabank this Wednesday to freeze mortgage payments for a year to ease interest rate hikes, to which rate increases must be added, as part of talks with the Ministry of Economic Affairs to support mortgages. Debtors who have more difficulty making payments. Financial sources indicate that negotiations are still open and a closed agreement has not yet been reached, although the sector views the proposal as positive and is studying complementary measures to the sector’s code of good practice, which is already considering the possibility of quota reductions in cases of financial weakness. It has not yet been determined since when the freeze will be applied and at what benefit, if part or all of the increase in fees after the rise in Euribor, is reversed, to any debtor or from what situations it may be requested. In any case, the sources indicate that the sector does not think about the problem of non-payment and that the banks are the first interested in the ability to collect installments and facilitate their payment in the necessary cases. The number of clients that will be affected by the fee increase corresponds to 75% of mortgages in progress, which is a variable rate. However, the average age of a mortgage in force today is 11 years according to Spanish Mortgage Association data, so considering that the average mortgage currently signed is 23 years according to the College of Registrars, it is noted that there is a significant amount of Credits that will expire in the coming years. This means that a significant portion of the pawnbroker will see their stakes increase, albeit for a more limited time than in other circumstances. The option to change from variable to fixed One option to avoid an increase in variable mortgage payments is to change credit to a fixed rate. An option that entails a cost to the user but also to the entity. Circumstances vary depending on the mortgage, because although the bank can collect no more than 0.15% of the outstanding credit, either to change the method or extend the mortgage, and in the case of mortgagee who signed the contract four years or more in advance exempt from this amount. To make the change, you must mediate the agency and a notary. In the first case, the amount is usually around 300 euros, while the notary charges 0.2-0.5% of the remaining balance to be paid. These costs are borne by the bank, but an appraisal of the property is also necessary, as its price is usually around 300 euros and is borne by the user interested in changing the method. Finally, there is the possibility that the user will pay a commission to renew their mortgage, although only if this amount is included in the contract of sale of the house. Risks of Future Fee Increases from Asufin (Association of Financial Users) They favorably rate the rate freeze on variable mortgages to ease Euribor’s escalation, but warn that a mortgage deferral could extend the term of the mortgage and lead to higher residual fees. “It is today’s bread and hunger for tomorrow, because the interest that is not collected during the specified period (6, 12 or 24 months) will be deferred in the rest and end with fattening the rest of the installments,” they pointed out from the association. More Information News No Fixed, Variable or Mixed Mortgage: Which is the Best Option to Protect Yourself from Euribor? The news Yes, the big banks are ashamed of the war on deposits. Therefore, Asufin’s suggestion is that next year the bank will not apply a new increase to these mortgages in line with future increases in the index. “We understand that it is a reasonable offer given that it does not mean that the bank will lose, but it will not win as much for the relief of families,” he noted.

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