Banks are trying to prevent the collapse of family budgets by increasing the cost of money by “freezing” floating interest rates for all updates home loans. Regulated loans also fall into this category, provided that the debtor complies with the rules. The promoted measure is not only the result of pressure that the government is undoubtedly exerting due to the political situation, but also aims to slow down the uncontrolled rise in the cost of servicing home loans, which are the most sensitive category. debt, and prevent the risk of creating a new generation red loans.

Although the interest rate hike has not affected – at least for now – the €27 billion (29.8 billion including NPLs) that banks have in their portfolios, there is a risk. The first signs of deterioration in the ability to service their debts are reflected in the mortgage loans of debtors that were sold to funds, and therefore discussion of the stabilization of interest rates will, according to information, also cover regulated loans left to banks through securitization. These are loans worth 21.4 billion euros, which, after successive agreements, are in any case serviced insignificantly, and, according to information, some of them have already begun to return. An alarm bell sounded in a recent speech by the president of one of the largest management companies doValue, Thodoris Kalantonis, who noted that “the increase in interest rates is significant and rapid.” Although, as he clarified, at the moment “we are not seeing massive defaults on regulated loans, but if interest rates continue to rise, the problem may increase, especially for the population.”

The burden already borne by households translates into significant costs, reaching 1,907 euros per year (159 euros per month) for a loan of 100,000 euros with a maturity of 20 years, calculated at an average bank margin of 2.5% and therefore the final the interest rate is 5.5% (Euribor 3% + spread 2.5%), while for the same loan the burden reaches 2,251 euros per year (187.6 euros per month) if the final interest rate reaches 6% .

It aims to include loans that have been purchased by funds and are regulated.

The “freeze” of interest rates will affect all informed mortgages, as well as those that are up to 89 days past due, while the debtor pays the amounts due. The date of entry into force of the “freeze” is being discussed – March 31. This means that any charges applicable from March 31st onwards subject to changes in interest rates, which are the benchmark for home loans, will not apply. The “freeze” applies to floating rate mortgages based on either 1-month euribor, 3-month euribor, or ECB base rate or libor, based on which the mortgage installment is calculated in Swiss currency.

The goal is to stabilize loan payments at March levels over the next 12 months, ie without the further burden of new interest rate hikes that are expected to occur in the next period. Since the reference date is March 31, the 3-month euribor will stabilize at around 3% and in addition each bank will calculate the margin (spread) agreed with the borrower and thus the loan payment will be determined. It should be noted that the ECB is expected to embark on at least two interest rate hikes of 0.25 each, or 50 basis points in total, in the near future. The cost of the measure in terms of bank loans is calculated based on Axia’s estimate of 146 million euros if the upcoming interest rate hike is limited to around half a unit.

The exact figure for how many loans will be included in the measure has not yet been determined. According to the banks, the average loan in the total portfolio of 24.5 billion euros they have on their balance sheets is close to 70,000 euros or even less, as several borrowers who took out loans before the crisis repaid a significant part of their debt. In this calculation, the number of loans that will benefit from the freeze measure is between 380,000 and 540,000, but if the measure also includes sold loans, the number could be much higher. The condition is to reach an agreement with the funds that bought the loans, a decision on which is expected to be made next week.