Still in negative values for three years, but up. Gradually, but without rest. For the tenth consecutive month, the Euribor does not abandon the upward path that it undertook last April, when it went from the historical low of -0.191 (a percentage that had registered in February and March 2018, as well as in December 2017) to -0.190. Since then it has been climbing levels, until closing January at -0,116. Experts agree that this reference index for mortgage loans will not return to positive values until next year or, at least, the end of 2019. They diverge, however, as to the changes that could occur on the mortgage offer. Will real estate loans become more expensive? And, if so, what will be the magnitude of this increase?
By representing the average interest rate at which European banks lend money to each other, the value of the Euribor is set every working day, but what is taken as a reference to establish the variable rate of the mortgage is its monthly average, which is collected by the BOE a few days after the closing. The mortgaged must return the capital loaned by the financial institution in the negotiated period through monthly installments in which an interest is applied. If this is variable (as in 60.7% of the mortgages that were signed in November, according to the latest data available from the INE), will be composed of two parts of which only one can really change: the Euribor. To him, the financial entities add a percentage that does not vary, called differential. In this way, if a mortgage has an interest that corresponds to the Euribor plus one percentage point of differential, its rate will be now: -0.116 + 1 = 0.88%.
Few euros more in the fee to pay
Not necessarily the increase recorded in the Euribor this month will have consequences on a mortgage. For that to happen, two conditions must be met.
First: that the loan is a variable rate, since, if a fixed rate has been negotiated, any increase or decrease in the Euribor will not affect it.
And second: that the review, which is usually every 12 months, now. This interannual variation of the Euribor turned positive last September, for the first time since mid-2014. At that time it was an increase of just 0.002 points, which translated into a few cents more to pay in the monthly fee. Now the variation reaches 0.073 points.
"This increase is so low that it will more than compensate for the salary increase", Says the general secretary of the Spanish Association of Value Analysis (AEV), Paloma Arnaiz. It is true that "any rise in rates makes it difficult to buy a home," admits Arnaiz, but, "if labor and salary conditions improve at a rate similar to that of Euribor itself, its increase would not represent a serious disincentive. " In the same line, the general manager of the intermediary Your Mortgage Solution, Ricardo Gulias, calculates that "a Euribor to 0% for an average loan of 100,000 euros to 25 years would cause a rise of 9 euros per month, which is not significant and it does not cause problems when paying the fee ".
2019, one year without major changes
The experts do not predict a relevant inflection of the index this year. "The Euribor will end 2019 at levels very similar to those we have now," predicts Rafael Alonso, an analyst at Bankinter. And this, for one simple reason: the monetary policy of the ECB-on which the evolution of interest rates depends- "will remain lax at least this year"He adds. Arnaiz also predicts positive rates only for "well into 2020", since the economy of the eurozone "begins to show certain signs of fatigue", so the ECB will delay another year the rise in interest rates.
"The engine of Europe, Germany, throws nothing positive forecasts; Italy is stuck; France has open social issues that prevent facing positive growth; Spain suffers from internal political problems Y the uncertainty of a spring election; not to mention the Brexit, that nobody knows yet how it's going to end", Summarizes, in the same sense, Gulias.
The new Real Estate Credit Law
Does all this mean that mortgages will not get more expensive, at least this year? The answer, in the opinion of the experts consulted, is not so much in the Euribor, but in the fixed part of the variable rate: the differential. Following the Government's decision that the bank should pay the Tax on Documented Legal Acts and the sentences that establish that part of the constitution expenses also correspond to the entity, the bank "has to adjust its margins," says Gulias. In this way, banks no longer perceive "the low spreads that we have recently seen as the solution to attract customers," he concludes. These will only continue at very low levels if the linked products that increase their profitability for the entity will be subscribed. "Hence also that the bank promotes the fixed rates, since this modality ensures the benefits for the shareholders and minimizes the risk", in his words.
Arnaiz attacks the new Real Estate Credit Law, whose approval in the Senate is expected in March, and blames the next "tightening of credit access requirements, especially for the younger or disadvantaged, for hindering profitability and reduce security in the recovery of the amounts lent "
With the Euribor in negative rates and with the aim of guaranteeing certain margins of profitability, the entities opted for attractive fixed rates, aimed at clients with a more conservative profile, who seek stability before everything. Thus, mortgages at a fixed rate grew from the 3,357 registered in January 2016, to 14,348 in January 2018, according to the INE.
"With the Euribor close to zero, it would be simpler to contract a loan with a variable rate," says the director of mortgages of the iHealth savings comparator, Manuel Gonzalvez. "But, now that this index grows, even if only in fractions of tenths, the ghosts of the past reappear and some users return to opting for the fixed mortgage," he says. According to Gonzalvez, the evolution of the Euribor in the coming months will continue to affect the proportion of fixed-rate mortgages that are signed.
When this regulation is finally approved, "financial institutions will be obliged to pay the expenses derived from the mortgage, except for the appraisal, and they could transfer them to their clients, although this is still an unknown as some are choosing not to increase the cost of loans as a commercial weapon, "clarifies the director of studies of the real estate portal Fotocasa. "The Spanish mortgage market is very competitive and the rivalry between the entities could soften this possible increase," he says.
Who completely discards this scenario is Alonso. "The differential measures the risk that the sector perceives on a specific business segment, in this case, the mortgage," argues this Bankinter analyst. "The labor market continues to improve, the prices of the houses increase repeatedly, and the ratio between the capital loaned and the value of the house is at very sensible levels. There are no signs of deterioration, so I see no reason to raise the spreads significantly, "he concludes. For Alonso, this year will be marked by a Euribor and some fundamentally stable spreads, some rates that only in the last part will go up "very lightly", and a greater movement in mortgages at fixed rates, "for the good long-term offers that exist in this segment. "