-Why getting a mortgage is now more difficult?

  • Laura Martínez, from iAhorro explains the reasons why getting a mortgage has become -almost- an impossible mission.

  • For a house of 150,000 euros, a buyer would need 30,000 for the down payment and about 15,000 for notary fees

  • How much has a variable mortgage risen on average this year?

The banking sector has been on guard against inflation and the rise in the Euribor. Now to grant a mortgage, the banks think about it and tighten the conditions. What three months ago was a fairly accessible procedure for workers with an average payroll and some savings, has become an impossible mission. From iAhorro, Laura Martínez calls it “the end of the honeymoon” of mortgages” and explains the reasons why get a mortgage has almost become mission Impossible.

Los banks are turning off the tap and to grant a loan they ask more requirements, among them, have more savings. They risk less with the amount they lend. We are facing what the specialist calls “the perfect storm for the economy“, which began in February this year with the invasion of Ukraine, runaway inflation due to the increase in the price of fuel and food..

To top it off “a few weeks later the European Central Bank warned of a rise in interest rates.” In the end, the economy is like a chain of causes and consequences, because the 3% rise in the Euribor “has caused a increase of up to 400 euros per month in an average mortgage of 300,000 euros.”

This index as a “general rule, in a year usually rises or falls between 0.5% and 1%. So “what we are experiencing now had never been seen since the Euribor was born in January 1999,” says Laura Martínez, spokesperson for iAhorro.

Fixed-rate mortgages become more expensive or disappear

The Euribor rise dragged users looking for a fixed rate mortgage, that is, pay the same amount until the end of the loan. The banks raised the rates of these mortgages, making “the interests for all the new mortgagees” more expensive.

In April of this year, fixed mortgages disappeared below 1% TIN that put “an end to the honeymoon that the market has experienced with extraordinarily cheap mortgages”, something unprecedented.

Con the rise in interest rates the rates of indebtedness of families increase, hit by the increase in shopping cart prices, light, gas.

Getting to the end of the month has become an odyssey for Spaniards “which is why banks have begun to look closely at the financial situation of all new mortgage applicants” to prevent a repetition of the situation of the 2008 crisis So, the indebted families could not pay their mortgages and the entities ended up with a housing stock. “This situation is beginning to put out of business all the profiles that could go a little fairer to ask for a loan.”

Thus, the spokesperson for iAhorro explains how what began with the Russian invasion of Ukraine It is having repercussions in each one of the plots of our life and turning everyday life into hell.

The banks think about it and ask for more savings to grant a mortgage

“The usual financing given by entities to citizens is usually 80% of the purchase price of the house or appraised value, but in cases of “ good profiles, percentages close to 90% could be reached and in some exceptions 100%”.

With inflation soaring, the Euribor on the rise and the drums of war in Ukraine, “these percentages are getting harder to see so to request a loan for the purchase of a house you need now more savings that a few months ago.

As this specialist, spokesperson for iAhorro, acknowledges, for citizens “getting these savings is not an easy task”: to buy ora house of 150,000 euros, At least 30,000 would be needed for the down payment and around 15,000 for notary fees. “If they prices keep going upit will be more and more complicated get the necessary savings for him access to mortgage credit”, emphasizes Martinez.