Mortgage: 1 in 5 households unable to pay premiums

With rising bank interest rates weighing on an already “battered household budget” and with no clear indication of when the cuts will begin, one in five households with mortgages say they cannot meet their financial obligations and fear losing their home due to growing debt.

More than 8 out of 10 households (84.4%) are owner-occupied compared to 15.3% who pay rent, according to the IME GSEVEE survey.

Of owner-occupied households, 21.3% have an active mortgage (21% in 2021). Of these households, 18.7% (16.5% in the 2021 survey) make loan payments often with some delay, and 8.5% (6% in the 2021 survey) are more than 3 months overdue.

The increase in bank delinquency on mortgages recorded for 2022 compared to 2021, according to IME GSEVEE analysts, is also likely due to the significant increase that is observed in lending rates due to the sharp and significant increase in interest rates by the European Central Bank , which led to increase in monthly payments on housing loans even up to 30%.

The picture worsened relative to the 2021 survey and households’ estimates of their ability to service their mortgage obligations in 2023. In particular fromhouseholds living in their own housing and having a mortgage loan8.6% (8.1% in 2021) said they would be unable to meet their loan obligations, and 12.9% (7.2% in 2021) said they were likely to be unable to meet their loan obligations, writes ot.gr.

There is an increased fear of households compared to 2021 that they may lose their homes due to debts. In particular, 14.4% (11.3% in 2021) of households expressed fear of losing property due to the inability to pay obligations to banks or the state.

It should be noted that from January 1, 2018 to November 30, 2022, more than 55,900 electronic auctions (data from iMEdD Lab).

Households that express concern the most are large households (5 or more people), 25.5%, and those with at least one unemployed person (24.1%). Large families and those with at least one unemployed person are the most pessimistic about their future financial situation, mainly due to rising inflation. In particular, 64.2% of households consisting of several people and 61.9% of households with at least one unemployed person are very pessimistic.

7.9% of households are in arrears with banks on consumer, business loans and/or cards, and 8.7% of households said they would not be able to meet the above bank obligations in 2023. In addition, 3.8% of households said they had their accounts and assets frozen or confiscated in 2022 due to debt, a multiple of the 2021 figure of 0.8%.

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