Sumar is committed to approving, together with the General State Budgets, measures to establish a safety net for mortgaged families in the face of future inflationary crises. The coalition will bring to the negotiating table with the PSOE on public accounts a proposal that it presented publicly this Friday and that basically seeks to force banks to have to offer their products. a fixed rate mortgage whose interest rate would be determined by the State and it would be, in principle, equivalent to that of the 10-year Spanish public debt. All clients whose payment does not represent more than 40% of their income and who have an indefinite contract could qualify for this mortgage.
The objective of this proposal is that, in times of stability and low rates, citizens have at their disposal a cheap and fixed rate mortgage. thus discouraging them from opting for variable rate loans, which are usually offered with lower installments but in which defaults are concentrated when inflationary crises occur like the one that Europe is beginning to abandon, since interest rate increases translate into upward revisions. This was explained this Friday at a press conference by Sumar’s economic spokesperson, also a deputy Carlos Martín, who explained that this model has been working for years in France.
Sumar registered the proposal this Friday as a non-law proposal, a text without legal effects that will only serve for the measure to be debated in Congress. However, Martín confirmed that his training is negotiating the measure with the PSOE in order to include it in the agreement for the General State Budgets, an agreement that would not be definitive because it would subsequently have to be negotiated with the rest of the Government’s parliamentary partners but which, in any case, for now is “distant”, as confirmed on Thursday the second vice president and leader of Sumar, Yolanda Díaz.
The fixed rate mortgage model regulated by the State is, in reality, simple. All banking entities that offer loans for home purchases could continue doing so as before: the novelty would be that the State would force them to include one more among these offers, that of the regulated mortgage. The interest rate on this loan would always be that of the 10-year Spanish bondas long as this does not fall below 1%, and would not vary during the term of the mortgage. Furthermore, banks could not link services to the product with the aim of reducing the interest rate, with the exception of opening a bank account in the entity in which the payroll is domiciled.
The mortgage regulated by the State would only be used for the acquisition of a primary home, not a second home, and the total amount of the loan could not exceed 80% of the total amount of the property, the usual practice in this type of product. Regarding the repayment period, the maximum would be 30 years. And to access the product, the State It would only allow banks to put two conditions: that the client has a stable employment contract and that his debts, including the mortgage, do not exceed 40% of his income.
If implemented, this type of regulated mortgage would not only be accessible to families who are currently looking for a loan. Banks would also be forced to offer this product to those who already have a mortgage, who could novate—or subrogate to another entity—their loan. Today, this model would not be particularly competitive, since the 10-year Spanish bond has an interest rate of 2.9% and there are fixed-rate mortgages currently being offered below that figure. However, the objective is that, when the inflationary crisis subsides and interest rates fall, the regulated mortgage is equally or more attractive than variable rate mortgages, in order to prevent clients from deciding on the latter.
Martín emphasized the need for banks to “assume the mortgage risk”, given that “they profit from these types of products”, and not “families, who only seek financing to have a roof over their heads” . For Sumar, the Spanish mortgage market is subject to “deficient” regulation, a problem that his deputy assured that the training wants to solve. “approaching it as in the case of the electricity oligopoly: regulated rates for both gas and electricity, which have allowed households to have a reasonable rate,” even with interventions expressly designed to lower prices, such as the Iberian exception.
The measure would have no cost to the public coffers, since, as Martín confirmed, the State would not guarantee the regulated mortgages that are signed: it would only force the banks to offer them. “Banks operate with the public concession of being able to create money from nothing, a very powerful concession, since they do not need anyone to deposit money in the bank to be able to lend it, and from this public concession a series of obligations must arise” , argued the Sumar deputy.
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