Major entities warn that any measure forcing loans to be cheaper or more flexible will reduce supply and raise prices. The Government is negotiating a housing decree with its partners.
The banking sector has issued a warning to the Government: if the mortgage market is intervened to lower loan costs or relax granting criteria, credit will become more expensive and supply will decrease. This is conveyed by financial sources from the main entities of the Ibex 35, at a time when the Executive is racing against time with its parliamentary partners to approve a housing decree, as reported by Vozpópuli.
"We cannot be forced. And if it is attempted, it will lead to less credit and more expensive credit. It would be worse for the housing market," say sources from the major banks. The threat of intervention has loomed over the sector since the National Commission on Markets and Competition (CNMC) opened an investigation in June into the pricing of mortgage loans.
The agency accuses several entities of anti-competitive practices for announcing their commercial policies in press conferences, particularly regarding fixed-rate loans. The CNMC is investigating whether Santander, CaixaBank, BBVA, Bankinter, Sabadell, and Unicaja effectively agreed to raise mortgage prices ahead of the European Central Bank (ECB) cycle change.
It is assumed in the sector that the cost of credit will be higher at least until 2027, regardless of what the Council of Ministers decides. Santander expects official rates to exceed 3% next year, while CaixaBank, which holds over a third of the mortgage market in Spain, anticipates rates reaching 3.5% and even 4% in the long term, as indicated by its CEOs, Héctor Grisi and Gonzalo Gortázar, at a financial meeting organized by KPMG and Expansión.
"We cannot be forced. And if it is attempted, it will lead to less credit and more expensive credit. It would be worse for the housing market," indicate sources from the main banks of the Ibex.
In this scenario, banks will raise the cost of mortgages above 3% as a result of monetary policy, according to a senior banking executive who requested anonymity. As of July, the average rate at which mortgages are granted in Spain stands at 2.89%, above the official money rate (2.5%) but among the cheapest in Europe, according to the latest records from the Bank of Spain.
The sector believes that the Government should prioritise measures to promote housing construction and cover a deficit estimated at one million homes by 2028. CaixaBank already anticipates a slowdown in mortgage demand in 2027 due to rising rates and high housing prices, which hinder access to purchase.
"Any measure on mortgages will only restrict supply. And it would create a vicious circle of more expensive credit with less granting," warns a senior banking executive from the Ibex.
The sector also dismisses the need for a shield to protect mortgage holders from the Euribor, which exceeds 3%, as occurred in the 2022 agreement. "In this cycle, the rate increase has not been so sudden," say financial sources, who recall that the money price reached 4.5% and started from 0% to tackle inflation after the Ukraine war. Furthermore, new production is concentrated in fixed interest, which is agreed upon in more than eight out of ten mortgages approved by an entity.
In entities such as Bankinter, BBVA, and Sabadell, executives warned that the cost of granting mortgages in Spain was not reasonable due to the price war, which was below the interest of the ten-year Spanish bond, a benchmark for corporate financing.
You may also like
