Euribor

Banks are accelerating the theft of mortgages due to the declining demand for new loans due to rising interest rates. Since the middle of last year, entities have been immersed in a war to snatch these credits in order to gain clients and increase their business.

The trend of these operations is on the rise and, according to the latest available data collected by THE OBJECTIVE, they totaled an accumulated annual increase in November of 5.4%. It must be taken into account that the subrogation of the creditor in mortgages – that is, financing that has been transferred to another entity – It had been experiencing setbacks since the beginning of 2022 and until the first part of 2023.

The weakness of new requests is forcing banks to be somewhat more aggressive in stealing old loans, carrying out offers, to somewhat increase their activity and attract users. Furthermore, the situation allows it, since, although defaults have begun to appear in this segment, the increases are still not too worrying and the ECB has concluded the stage of increases in the official price of money.

The pace in the change of bank mortgages, according to figures from the National Statistics Institute (INE), has been on the rise, leaving behind the declines that reached 7.7% in March. In summer this phenomenon began to rebound and, thus, in August they already advanced 1.4%. Now, as noted above, the rise is much greater.

Although, theft in home loans is still far from the marks of 2021, when these transactions reached a record by increasing more than 156%. Then the sector was immersed in a real battle to gain customers after the pandemic and there was a boom real estate.

The circumstances at the moment are different and it is taking advantage of the opportunities that arise to attract users. The rise in rates and inflation is hitting the pockets of citizens, who are looking for better offers to try to reduce the installments they pay for mortgages. A phenomenon that is overlapping with the barrage of early debt repayments and changes in interest rates applied from variable to fixed.

Hereinafter, Once there is greater clarity about the drop in the price of money, banking sources assure that theft could begin to diminish although, in any case, they emphasize that if there are opportunities to take credits away from the competition, they will materialize.

The entities are trying to reactivate the mortgage market as much as they can, now that everything indicates that the ECB will reduce rates this year and the Euribor has suffered the first setback due to expectations that this movement will arrive soon, even before spring . The monetary body, however, is trying to cancel these very optimistic forecasts and is making it clear that the decline will not occur, at least until June or July.

At the moment, it is already reducing the price of new loans to purchase a home and is focusing, once again, on those at constant rates for life to revive the business. In November the mortgage firm plummeted 19.1%.

For banks, loans for apartments represent an essential niche. They represent around 40% of their financing portfolio and it is a product with which they manage to link clients through discounts on their cost so that they take out insurance, cards or investment funds, in addition to direct debiting the payroll.

The forecast that the entities manage is that little by little, once the fall of the Euribor is confirmed and the ECB gives new clues about its monetary policy. But In the sector, it is not expected that there will be a complete recovery in new mortgages in 2024. Even so, it is indicated that the collapses of 2023 are a certain return to normality, since in 2022 there was a buying spree due to the rate increases that the ECB was then projecting to control inflation. These increases were greater than initially expected and have brought the price of money to 4.5%.

2024-01-28 02:33:15
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