EURIBOR’s upward trend is causing a tide of mortgage changes from variable to fixed interest rate so far this year. Mortgage holders are increasingly requesting banks to change their mortgage interest rate as the reference rate’s ongoing rise directly impacts Spanish mortgage payments with monthly increases of up to hundreds of euros.
Variable to fixed interest rate, an ever more common transaction
In today’s context, a holder can change the interest rate of their mortgage. Fixed rate mortgage offers with an interest below 3% are scarce. Nevertheless, and even though it is not the same interest rate that could have been signed at the beginning of 2022, owners will gain stability on monthly mortgage payments as all seems to point this upward trend will go on for the following months.
‘We recommend not waiting around and, if a competitive mortgage offer is found, signing at the first possible chance,’ informs Vicenç Hernández Reche, Tecnotramit’s CEO. ‘Mortgage conditions can always be negotiated during the life of the contract. The mortgage holder’s circumstances and economic power must be taken into account, though. Ultimately, changing from a variable to a fixed rate mortgage will depend on the bank’s willingness based on the client’s credit situation,’ as indicated the expert. Bank transaction costs to change interest rates vary between €500 and €1,000.
A good viewpoint for the Spanish mortgage market
Hernández Reche understands the current mortgage scene is positive and indicates that ‘forecasts for EURIBOR’s evolution came true just as we expected, since we reached 4% midway through 2023 as was predicted.’ ‘It is positive that interest rate trends and evolution are foreseeable, as this provides very valuable information for the market on a whole and transaction viability is easier to calculate and adapt to each situation’s circumstances,’ as the executive assures.
Tecnotramit also highlights the Spanish market is ‘very well positioned right now’ thanks to factors such as a vigorous labour market, household savings’ rates, private savings resistance, and financial institutions good standing, which have enough equity to absorb any potential losses.