New mortgages are slowing down as a result of current macroeconomic conditions. But if there is an upward trend, it is surrogacy, which has gained strength in recent months with the aim of saving as much as possible at a time of rising interest rates like the current one. In this sense, the mortgage change that is taking place the most at the moment, iAhorro points out, is variable by variable, making it possible to significantly reduce the differential that is applied to the Euribor and, as a consequence, slowing down the increase in the monthly increase.
In this sense, they point out, a mortgage that would have been contracted a few years ago with a differential of 2% over Euribor has had a very relevant increase in the monthly installments to be paid in the last year. It should be remembered that the monthly Euribor closed the month of March at 3.647% while in March 2022, just a year ago, it marked its last negative rates, so those who have had to review mortgage loans with this reference are among the most affected. To avoid such a blow, many families chose to look for other financing alternatives.
“Today there is no competitive fixed mortgage and depending on the customer profile, the mixed type are not offered”, they point out from iAhorro. “Many times the only alternative for those who want to change the mortgage for another is a variable, especially now that a few months have passed since they began to raise interest rates,” sources from the financial sector point out to questions from this medium.
For this reason, with the focus on maximizing savings, families are looking for a change from those mortgages that had a differential of around 1.8% or 2% to others that, today, with the change of entity , They can easily be in the Euribor plus 0.6% or 0.8%. Thus, the rise of this indicator in the last nine months is slightly modulated by the lowering of the differential that is applied.
Sources from the sector explain to this medium that “The optimal moment to carry out a mortgage subrogation has already passed“, although they remember that depending on the time and conditions in which the loans were contracted, significant savings can still be achieved in the monthly installments through a process of changing the entity.
Will the Euribor continue to rise?
The question for many families when choosing to change their mortgage or stay as they are is whether the Euribor will continue to rise in the coming months or, on the contrary, the peak of the curve has already been reached. Recent events in the financial markets, with the bankruptcy of SVB in the United States or the forced purchase of Credit Suisse by UBS in Switzerland, have led to a slowdown in the rate of rise of this indicator after several consecutive days down. For this reason, the outlook for the short and medium term has changed in recent weeks.
“At the beginning of the month we were betting that it would close at 4%. However, with the bankruptcy of the US bank Silicon Valley Bank (SVB) and the subsequent rescue of the Swiss financial company Credit Suisse Group, we have seen many ups and downs in the values of the Euribor and 4% has moved away a bit. We continue to believe that this indicator will reach 4% this spring“, affirmed the mortgage director of iAhorro, Simone Colombelli, a few days ago, according to Ep. For her part, the co-founder of HelpMyCash, Olivia Feldman, indicated that “everything will depend on the evolution of inflation in the eurozone and the Confidence in the financial sector”. “If it continues to soar, it is very likely that the ECB will keep its rates rising, which will increase the value of this mortgage index”.
Cancel instead of subrogate
But subrogation when considering the change from one mortgage to another is not the only option. In this sense, sources from the financial sector that work daily in the contracting of mortgages, point out to elEconomista.es that in many cases the cancellation and opening of a new mortgage is used instead of subrogation to obtain better economic conditions. In this way, new mortgages are considered when accounting for the total monthly operations, although it entails, in most cases, the assumption of the cancellation costs that would have been set at the time the original mortgage was contracted. .
