February 20, 2013 at 2:53 pm #57286
I obviously think about the whole Spanish mortgage situation a lot, as do many others.
It seems to be getting worse and worse and the Government aren’t doing that much to help are they? They get their friends the banks bailed out and what happens? Seems to be not very much.
Why then can’t all banks automatically tap into every mortgage account on their systems and change interest rates to say 1% for everyone. Without the blooming notary payments and fees and paperwork usually involved in these things. Those who have been struggling to pay their fixed 5% would then have much less to pay each month and might be able to manage to stay in the property? Those who earn more will then have an excess of ‘cash in hand’ and would hopefully start spending and help the economy (eating out in restaurants, having a new kitchen put in, a new car etc.)
Wouldn’t this help the economy far more than anything else? It could be a set 3 years of 1% interest on all mortgages ?
We only pay 2.3% and it’s helping us as we can see that we are clearing as much capital as interest payments, and the bank must be furious. Why though should the bank earn so much interest and then moan that they have so many bad debts on their books? If they get their bail outs can’t they also help out the people as well?
February 20, 2013 at 3:13 pm #115491
Because Spain is inherently corrupt and Bankers greedy as well.
I didn’t see anyone forcing them to loan all that money in mortgages, yet as soon as people start defaulting, they go bleating to the government for a bail out. People defaulting on loans and mortgages is a risk associated with loaning that money, that’s why banks charge higher interest rates.
It seems banks can make as much money as they like and pay themselves massive salaries and bonuses when things go well, yet as soon as some of their decision making goes wrong (like exposing themselves to too many risks) and they start losing money, the government via the EU bail them out.
It’s heads they win, tails they win.
February 20, 2013 at 5:26 pm #115508
In the US I have a perfect credit rating. But it took months to get a mortgage in Spain, with me putting 40-50% of the purchase price in cash. I finally got a variable-rate mortgage, something like the index + 2.25%, but with a with the base rate of 4.25%, meaning I’ll never pay less than 4.25%. It is a 20 year mortgage, and the moment I have to pay 5% or more, assuming that interest on savings continues to be in the gutter, I’ll pay-off the mortgage.
Yes, I could pay it now, but as I’m headed into ‘early-retirement’, I want to have a as large of a financial cushion as possible.
February 20, 2013 at 6:10 pm #115509
The entire banking and political system in Spain seems to be in rudderless freefall at the moment. I watched the Spanish news this afternoon, on the hour, which included another denial speech by Rajoy. The corruption debate moved to the regions, tranquil Asturias, wealthy Pais Vasco, Catalonia, and it was all the same, the same theme of corruption and loss of faith in regional and national government.
I got so depressed I switched over to Sky News, and a revelation that driving test examiners, instructors and people taking the test all conspired to pay to pass, all over the UK. I switched off and had a siesta.
It must be the same in Spain, because the driver who nearly crashed into me this morning, a Spaniard, could not possibly have passed a driving test. Anywhere.
Spanish mortgages seem to be getting easier to get again, but as with all businesses, they concentrate on new customers and forget about existing ones.
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