Sumar offers PSOE an regulated fixed-rate mortgage linked to ten-year Spanish debt.

Zumara’s economic representative in Congress, Carlos Martin, presented this Friday a non-legal proposal that includes this proposal and which he confirmed is on the negotiating table for budgets for 2025and another set of measures aimed at introducing more fixed-rate mortgages into the “abnormal” variable market.

“In Spain, of the total number of outstanding mortgage loans 70% – at floating rates and this is the opposite of what happens in other countries such as Germany or France, where the majority have a fixed rate,” Martin said at a press conference this Friday.

In particular, more than 70% of the 626.680 million total outstanding mortgage balances are subject to variable interest rates, which puts Spain in this position, says Sumar: “abnormal and vulnerable» in the face of any generalized inflationary process such as that which occurred after the war in Ukraine.

Banks obliged to offer this

In this scenario, Sumar assumes that banks are obliged to offer to its clients this new regulated mortgage, which will always be linked to the yield of the then ten-year Spanish sovereign debt.

Other features of this mortgage are that Your shock absorption system will be French or German. and will have maximum services related to the mortgage loan. Specifically, a direct debit of wages to the account from which mortgage payments are made. There will also be no opening or early cancellation fees, and the maximum credit limit on the home value will be 80%.

“All banks will be required to offer this mortgage and this mortgage will be written in the Official State Gazette with all its provisions in such a way that there would be no room for any abuse clauses to appear“- noted the economic representative.

The conditions for access to this person are that he has “stability in the labor market” and that the cost of the mortgage plus the family’s other debts does not exceed 40% of their income, which Martin said is “within the reasonable risk standards” at which banks now offer mortgages.

“Very competitive” with low rates

Martin argued that these mortgages would be “very competitive” in times of low interest rates when bond spreads are tightening. “This would be a very convenient mortgage for a home.Likewise, they will compete with the “money illusion” created by variable mortgages in times of low rates.

As for the risk banks will take on with this new mortgage, Sumar says it will be “zero.” This is due to the fact that, on the one hand, The cost of the provided guarantee will exceed the mortgage loan amount by 20%.. On the other hand, a mortgage guarantee in Spain is personal, meaning the mortgaged party is liable with all of his income and assets in response to the payment of the debt, and not just the value of the mortgaged house, since there is no dacion in Spain. payment, except in cases of extreme vulnerability.