The variable mortgage and guilt

Five years ago my partner and I bought a house and took out an adjustable rate mortgage. At that time, people were already hearing about the benefits of the fixed rate, but we chose, like 70% of Spanish mortgagees, the variable rate. That has allowed us to pay a lower fee than with a fixed rate for years. For this reason, although our choice implied a certain risk, it seemed to us that the expected rise in rates would remain within the realm of reason, barring disaster. Five years later, disaster has happened: the Euribor has reached 4%, a level we have not seen since the 2008 crisis, and our mortgage payment has skyrocketed. This being the case, I have asked my bank for some option so as not to have to assume such a deranged rise and I have found a well-oiled strategy to blame myself first and financially abandon myself later.

The first part of the bank’s strategy—one of the big ones, by the way—has been to make communication about the loan difficult. The office where we hired him has closed, like so many. And in the virtual it takes weeks to make an appointment. Their stupidity is strange to me: they’ve lent us a lot of money and they should be worried that we won’t be able to pay it back. But they don’t care. On the contrary, the woman who attends us explains that we can face the climb. She knows this better than we do because she has access to all of our financial information. All in all, I insist that they should provide us with options in the face of such a disproportionate rise and I suggest considering a change to a fixed rate. It is then that our interlocutor takes pains to explain to us that any improvement is impossible “at this point”. “The variable mortgage is very Latino,” she says. “In countries like Germany or France, most choose a fixed rate and know what they have to pay throughout their lives. It’s a forecast problem.” He uses the Latin word as a synonym for ignorance, financial in this case, although the bank he represents recommended the variable rate to us five years ago.

“What is not worth it is choosing a variable rate and wanting to change it now,” a colleague of those who chose a fixed rate explained to me when he heard my mortgage regrets. And why isn’t it worth it? I wonder. The rise in the Euribor will mean an extra cost of up to 12,000 million for mortgagees, according to the association of bank users Adicae. Some banks will once again become exponentially rich and, once again, are willing to force default (they learned nothing from 2008) before proposing competitive alternatives to their clients. Outraged, I look for other options. And, to my surprise, I find several willing to subrogate our mortgage, that is, change the bank and therefore the conditions. A box proposes a fixed rate for three years to return to the variable later. Another bank suggests a competitive fixed rate I feel like when I was a university student and I was threatening to switch to another mobile operator if they didn’t give me more information. Do banks really work like that? On the one hand, they talk about the free market while, on the other, they try to hold their customers captive with conditions that are not competitive. And how do they do it? Thanks to the guilt and shame of being in trouble to pay the mortgage. They need us to feel that what we pay is not the Euribor, but our bad decisions. And the more guilty, the more captive. When in reality the only thing a competent bank should do is, in its own interest, make it easy for us.