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At a time when inflation continues to rise due to skyrocketing energy prices, consumers have good news to hold onto: mortgages are cheaper than ever. Two factors come together to support this claim: some minimal interest and a reference, the Euribor, which, after a few months on the rise, is falling back below -0.5%, which is leading to a real mortgage war in which banks fight to offer the most competitive loan.
On the one hand, the TAE The average number of mortgage loans is at historical lows in banking, in the 1,57% (the lowest value was touched in July, 1.55%), according to the latest record available in the Bank of Spain, which corresponds to last October.
A value well below the one that closed in 2020 (1.67%), in 2019 (1.93%), in 2018 (2.24%) and, of course, in the years prior to the financial crisis. In 2011 it was in the 3.66%, while it was 5.15% in 2007. The maximum was reached in autumn 2008, with 6.21%.
An evolution that is coinciding with the minimum values of the Euribor. The index accumulates almost six years in negative and last autumn it seemed to anticipate a change in trend as the horizon for interest rate hikes approached, but in the last month it has fallen again.
After touching values above -0.48% in October for the first time in eleven months, in December it is on track to close below -0.5% after having touched the historic minimum on the 20th (-0.518%), which will once again lower the mortgage payments.
Competence
Two factors that make the mortgages that are being offered today cheaper than ever. Behind the collapse of the APR is an increasingly fierce competition between banks to offer the lowest rates, especially in the fixed mortgages.
A trend that, in turn, is driven by the falls in the Euribor, which have made banks rethink their strategies. Entities now prefer that clients opt for these loans as variable mortgages become less profitable for them.
Mortgage.
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“Mortgages are cheaper than ever. Especially at a fixed rate, since there are banks that offer interest below 1%. At a variable rate, interest is also the lowest due to the Euribor price, which is at historic lows, “he explains. Miquel Riera, responsible for Mortgages of Help My Cash to EL ESPAÑOL-Invertia.
In fact, this year there have been several entities that have lowered their fixed mortgages to attract customers, leaving aside the variables.
“On average, the fixed interest offered by banks is between 1% and 1.5%, although We are aware that there are banks that offer interest of less than 1% to highly solvent clients“, adds this expert. Low prices that are being combined with an improvement in other types of conditions.
Regarding variable mortgages, the spreads have remained stable throughout the year at an average of 1%, although the falls in the Euribor have made this type of loan cheaper. That is why “el interest on variable mortgages is lower than ever, “as Riera adds.
It is not surprising, therefore, that mortgage signing is skyrocketing. In September it increased by 57.7%, a record for the decade, and in October it has moderated, but continues to grow (27.9%).
We will have to wait to see where this battle goes, but the truth is that the Euribor, the ultimate cause of the banks’ strategy changes, will remain negative for at least one more year. This is what the bankers themselves believe, who continue to work with a scenario of negative rates despite the better prospects for the rise in the price of money brought about by the rise in inflation, as this newspaper reported. What is clear is that while entities remain pessimistic, consumers are the recipients of the good news.
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