Sumar has proposed to the PSOE to copy the experience of the electricity market in the mortgage market and create a regulated fixed rate mortgage, that banks would be obliged to offer to those who are going to buy their first habitual home, along with the rest of the mortgage loans.
Sumar’s Economy spokesman, Carlos Martín, who presented his proposal this Friday in the Congress of Deputies, has confirmed that this form part of the negotiation of the 2025 Budgets with its Government partner, within a package of measures to ensure that banks prioritize fixed-rate mortgages over variable ones.
The risk profile that the borrower should meet would require him to have a “stable employment relationship” and that the maximum limit of the mortgage payment plus the rest of the interest on debts will not represent more than 40% of your income.
The fixed rate of the regulated mortgage would be that of ten-year Treasury bonds, with a minimum of 1% APR, and the amount would cover up to 80% of the value of the home.
Sumar’s economic spokesperson has explained that the objective is for the banks stop transferring mortgage risk management to households, as well as “defending mortgaged families and those trying to buy a home“.
Abusive mortgages
For Sumar, it is intervene in the “banking oligopoly” against the “abusive” marketing of mortgages carried out by credit institutions in Spain, where they prioritize variable rate mortgages in deflationary periods to obtain more profit.
They also present to families “limited and non-transparent” offers, which means that they cannot choose or negotiate, but simply accept the conditions that are given to them.
According to Carlos Martín, the “deficient” mortgage regulation This is what has allowed Spain, unlike other large European economies, to the variable rate mortgage prevails for years.
Until 2015, 90% of mortgage contracts in Spain were at a variable rate, compared to 20% in Germany or 30% in France, although in recent years the fixed rate has gained prominence until it represents around 70% of new mortgages in 2022, before the start of the rate increase, and 60% currently.
Nevertheless, 70% of outstanding mortgages in Spain are at variable ratesstressed Martín, who insisted that these represent “an extra cost for families in the long term, compared to a reasonable fixed rate mortgage.”
The example of France
The Sumar deputy and budget negotiator has pointed out that the mortgage regulated by the public sector It already exists in other countries such as France, so it is about “copying those good practices and bringing them to our mortgage market to protect households from price crises, like the one we just experienced and that we will probably have in the future.”
After emphasizing that it is a “very competitive” mortgage for households In periods of stability in which rates adjust downwards, he has pointed out that families already mortgaged would have the possibility of switching to it.
Written in the BOE
In addition to being mandatory for all banksthis mortgage would be written in the Official State Gazette (BOE) with all its clauses, so that “the only thing that would have to be filled out is the name of the person who is mortgaged and that of the bank that grants it.”
“It would be a very convenient mortgage for households and this is part of the discussion we are having with the PSOE in the budget process,” defended Martín, after guaranteeing that Sumar is “working side by side with colleagues from the socialist party and the Government to approximate positions”, also in fiscal matters, where there is – he said – a “significant distance”, Despite which he has been convinced that they will achieve it.
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