A more expensive loan. After the judiciary gale that has lived the mortgage market In the last part of this year, in 2019, borrowing to acquire a home offering it to the bank as collateral will entail a greater economic effort. The reason -which all the consulted experts wield- is that the new real estate credit law, whose approval in the Senate is scheduled for March, will mean that the entities assume more costs than at present, and that these end up transferring them to the user. "The most logical thing is that, once the regulations come into force, an attempt is made to pass on the expenses to the mortgaged ones," admits Silvina Palacios, specialist in banking law at the Sanahuja Miranda law firm.
According to the text voted on June 20 by the Congress of Deputies (where another vote awaits, which takes into account the amendments eventually introduced by the Upper House), the bank must assume all costs associated with the mortgage, except for the appraisal, among other elements, as well as tighter control of the customer's creditworthiness by the entities. This regulation, which should have been approved in mid-2016, according to the roadmap set by European legislation, received new momentum after the imbroglio over who, between the financial institution and the client, should take charge of the tax of Documented Legal Acts (AJD). A conflict that the Government resolved in favor of the mortgaged, after a controversial ruling of the Supreme Court in the opposite direction.
The new mortgage law also establishes that the bank can not seize the property offered as collateral until 12 months of default have elapsed (or 3% of the granted capital has been refunded), if this occurs in the first half of the loan, and 15 months (or 7% of the granted capital) thereafter . The interest for delay, in addition, will be equal to the remunerative interest plus three percentage points, instead of what is currently established, that is, three times the legal interest. The new regulations also lowers the commissions for early repayment and it introduces a cost to go from the variable rate to the fixed equivalent of 0.15%. Another key is a new distribution of the costs of subrogation, so that this is not more convenient for banks than to formalize a mortgage.
Given this new framework, banks will not stay with their arms crossed. "Financial entities are companies that owe a return to their shareholders," argues Ricardo Gulias, general director of the intermediary Tu Solución Hipotecaria. "In one way or another they are going to make the cost fall on individuals, despite the government saying it will monitor these increases," adds this expert, who calculates that the average cost of a mortgage of 100,000 euros for the bank is about 2,500 euros, an amount that, with the current interest rates, the entity recovers in two and a half years. In his opinion, with the new law, and if the bank does not pass on the costs to the client, the time when it could have benefits of a mortgage would be delayed to four years, something that "does not make sense and is insane for the general economy "
Less mortgages at a fixed rate
In this context, the general director of Ibercredit, Santiago Cruz, points out that, after the entry into force of the Royal Decree Law by which the bank is required to assume the AJD tax, "most of the entities already touched the variables that affect their profitability, such as the opening commission and the interest rate ", although others have opted not to raise mortgages," as a commercial weapon ". And "a small number of entities already assume even the provisions of the Real Estate Credit Bill, taking charge of all expenses, including appraisal, but transfer them to the client through the interest rate," he adds.
Thus, 2019 is announced as the year in which the rates will rise around one or two tenths of a percentage, according to Gulias, who also believes that the penalty for early cancellation of a fixed rate mortgage – 2%, against 0, 25% or 0.15% of a variable rate, after three and five years, respectively- will make it less attractive.
In relation to a probable increase in the opening commission, "it is true that the jurisprudence declares it void when it does not correspond to a service actually provided by the entity," Palacios concedes, "but it is also true that the bank can act in a such that can justify that service, "he warns.
All in all, "once the banks have seen how their portfolio and profitability are evolving, in the second half of the year the fight for mortgages will return with a new price decrease," predicts Gulias. "The mortgage cycle is good and the new law will not stop the launching of competitive offers in the short and medium term," says Manuel Gonzalvez, director of mortgages at the iHahorro banking comparator. In his words, this diversification -necessary to attract the customer- will make revising the largest number of options even more important than before.