The trade unions have proposed to the Government the creation of a fund to protect against excessive increases in mortgage costs. A measure that can affect about 340,000 mortgages which, with the increase in interest rates and Euribor, they have more expensive about 1,900 euros per year. To measure has unnerved the right and the de facto economic powers, who tear their clothes predicting an impending catastrophe in the markets. In fact, experienced economists do not believe that the creation of a state mortgage protection fund will generate a financial earthquake – indeed, it could helping thousands of families to alleviate their economic situation, in such a way as to recover purchasing power, consume more and improve production and employment. We are therefore faced with a measure that encourages the already rigid Spanish real estate market.
What volume of money are we talking about and which budget items would they come from? According to some media, 650 million would be allocated covered by the bank tax. It should be remembered that the levy on financial entities expects to raise 1,500 million per yearwhich will increase as interest rates rise.
Everything indicates that the fund is more necessary than ever, but the Ministry of Finance is still reluctant to the provision. In other words, it is not clear that helping the consumer in this matter has beneficial effects for the economy. The ministry department refuses to limit mortgage interest and is suspicious of a bailout fund, as proposed by ERC and unions like UGT, for the possible effect called consumer default. “Don’t worry about the mortgage, someone else pays it. It is not serious ”, the government jokes. Furthermore, from the Executive they ask that whoever made the proposal specify it technically, since talking about something that is not in writing generates confusion.
According to the Fotocasa portal, the Euribor has been positive since last April, so much so that those families who have variable mortgages suffer an increase in the monthly payment. Mortgage holders will have to pay a larger amount of money than a few months ago. On the other hand, those who try to take out a new mortgage find themselves with an increase in prices. This increase affects both fixed and variable mortgages. The solution could come from a mortgage bailout fund, which would include aid through loans or soft subsidies. The measures of the bailout fund are still unknown. However, mechanisms such as moratoriums, reduction of installments, bonuses on commissions for changing the type of mortgage … In this way, families could afford the new mortgage payments.
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However, economics professor Gonzalo Bernardos assures that this measure would be harmful for those who want to buy a house in the near future. The reason is that banks would stop lending to the humblest families, which they already have difficulty accessing loans. This is why he has branded the provision as a “populist” and warns: “Not all capital letters are good”.
According to data from the UGT union, after the European Central Bank’s interest rate hike by 0.75 points and the Euribor hike to 2 points in September, when it was -0.49 points a year ago, mortgages in our country rose on average to € 635.8 per monthwhich means a 31.1% of the total gross average salary. In other words, families, drowned by the fuel crisis and the electricity bill, are destined to allocate almost a third of their income to meet the costs of home ownership. According to UGT, in this way, the monthly payment of an average mortgage increased by about 160 eurosor around 1,900 euros a year, an additional cost that represents 1.2 times the average full-time net salary of a month in Spain, and that most families will not be able to bear.
“After this reality that many families have to face, it is essential to insert new measures to protect access to housing to mitigate the impact of rising prices and interest rates, as part of a strengthening of the social shield”, assure the union sources. For this reason, UGT is asking for the creation of a state budget fund to help people and families who are paying a mortgage and who will see their cost increase in an extraordinary and excessive way in the next renewal, due to the increase in reference rates. established by European Central Bank.
For UGT this is a necessary action to avoid an excessive surcharge for many families, inscribed in the general framework of support for public and rental housing, accompanied by the extension of anti-eviction measures and the deferral of the rent, at least up to the law on housing comes into force.
relief for families
In this sense, UGT emphasizes that the beneficiaries would be people with some total income below the average salary in Spain and people or housing units in a situation of social vulnerability. To access this fund, subjects in possession of one of the requirements indicated must consider, in turn, that the monthly payment of the mortgage on the habitual residence exceed 30% of the monthly income net of the person or unit of cohabitation.
As for the amount, the state fund will cover, through a monthly allowancethe premium generated if the Euribor exceeds a value of 1.5 points and has a maximum duration of 12 monthswith possibility of extension if the established requirements persist.
It is estimated that the measure could affect approximately 340,000 home loans, which would require 650 million euros to absorb the entire premium generated by families. It should be remembered that the Government expects to collect 1,500 million euros with the new Tax on Large Financial Institutions for their extraordinary increases in profits, a figure that will be even higher by about 250 million after the announcement of the ECB rate hike, for which the size of the proposed Fund would be about one third of that raised.
“At UGT we do not close ourselves to other proposals that aim to protect families from the increase in the cost of the mortgage, because we understand that it is necessary to guarantee extraordinary lines of liquidity that avoid the accumulation of cases of insolvency and which result in a loss of power for families “, adds the union.
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