Vitoria (EFE).- The rise in interest rates has raised the mortgage payment in the Basque Country from 26% of salary in 2016 to 30% of salary last year.
It is a percentage considered “tolerable”, which could be exceeded this year and next due to forecasts that rate hikes will continue.
The Basque Housing Observatory, dependent on the regional government, has published a report on the impact of the rise in interest rates.
After its escalation, the Euribor is this Wednesday at 3.57%-.
The increase is 250 euros per month per mortgage
This rise in rates in 2022 has been very noticeable in variable-rate mortgages.
In a simulation of an average mortgage of 160,000 euros over 30 years, the impact of the increase from 0.5% to 3.5% represents close to 250 euros per month of increase in financial cost.
The variable rate mortgage 6 years ago accounted for 90% of the total signed.
In 2022 it only represents 42% of the total, so that fixed-rate mortgages already exceed half.
This reduces exposure to increases in the Euribor.
At the moment, this rise in rates does not affect the rate at which mortgages are signed.
It continues with a growing trend since 2013, when 12,146 mortgages were signed up to 22,905 mortgages in 2022.
However, this figure is far from the 30,000 mortgages that were established in the first decade of this century.
It is still early to see the effects of the rise in the Euribor in the granting of mortgages.
The average amount per mortgage constituted has grown in the Basque Country by 13,000 euros since 2019 to reach 163,000 euros on average in 2022.
It exceeds the state average of 147,000 euros.
This average level of indebtedness is very different depending on the location of the dwelling, being considerably higher in Gipuzkoa and Bizkaia than in Álava.
The average monthly mortgage payment in the Basque Country in 2022 stands at 720 euros, 49 euros more than the state average.
The higher average salary in Euskadi means that the effort to pay for housing stands at 30% of income, compared to 32% in Spain as a whole.
However, the mortgage payment effort has grown from 26% in 2016 to 30% in 2022.
The forecasts that point to an increase in the mortgage payment will mean that this trend will continue.
Several recently delivered housing blocks and others under construction next to the Bilbao estuary. EFE/Luis Tejido
The document recalls that the Basque Country is the only autonomous community that generally maintains the deduction for home purchase in personal income tax.
This deduction reduces the effective cost of mortgage payments by an average of 80 euros per month.
Rates go up but not evictions
So far the impact of the escalation in interest rates is not being reflected in foreclosures and releases (evictions).
Thus, in 2022, 180 foreclosures were registered in the Basque Country according to the INE.
In fact, they have been reduced compared to 2021 when they totaled 239 executions.
The judicial releases in the Basque Country in 2022 are about forty per quarter, similar to those of 2019 and 2021 so far.
However, given the forecast that in 2023 and 2024 interest rates will be maintained or increased and, therefore, mortgage payments, the report warns that it is foreseeable that the number of people and families that will have to face a financial effort for the payment of the mortgage that exceeds the “tolerable levels” that are around 30% of income. EFE