Reliable borrowers the most hard done by

Consistent borrowers who took out a loan in the previous decade or did not default on their debt and are still servicing it normally, without resorting to an arrangement, are the ones who are bearing the brunt of rising interest rates.

These are borrowers who took out a mortgage loan with a higher spread of around 4%, mainly between 2011 and 2019. Most of them did not settle their debts with a lower spread, as happened with the majority of bad loans during the crisis, so today they are shouldering a double burden, as they are not only paying increased costs, but also the cost of the inconsistency of those who renegotiated their loan agreement with the bank and obtained better terms.

Mortgage margins reached 4%-4.5% at the height of the previous financial crisis, when banks, faced with bad loans of more than 100 billion euros, had stemmed liquidity. At the time, for brave homebuyers, these interest rates did not seem prohibitive, as they were applied to negative euribor and thus the final interest rate seemed affordable. Now after the rise of the euribor to +2%, the average interest rate for these loans has reached 5.5%-6%, twice as high as in the eurozone and certainly expensive for the housing market.

Bank policy, which according to competent executives is limited by supervisory rules, has taken this category out of the picture of support, and even some programs that applied to consistent borrowers in the middle of the previous crisis were tacitly withdrawn. In this way, not only has the cost of servicing increased, but also the dissatisfaction of those who are consistent and who, despite successive crises, have avoided rearranging their debts once, twice or even three times.

Accordingly, banks showed reluctance, or at least the lack of a strong incentive, to include this category of borrowers in fixed-rate programs when this category of interest rates was still cheap.

This, more than anything else, illustrates that the banking system did not behave proactively even though this conversion is possible without significant costs for the borrower. Therefore, the fixed interest rates that dominated the market mainly in the last two years were used as a tool to attract new customers and not as a line of defense for consistent ones.