Banco Santander, in its commitment to young customers, is going to become the first Spanish institution to facilitate access to housing for those under 35 years of age. To do this, the company led by Ana Botín, has promoted a pilot project through which it will launch 1,000 mortgages for young people in which it will grant financing of up to 95%, as confirmed by the bank to elEconomista.
This will favor clients with solvency, but who have not had sufficient saving capacity, to be able to access the purchase of their first home, thus offering a solution to one of the social and structural problems that our country faces: late emancipation and the inability to purchase a home.
According to data from the first semester of 2020 from the Emancipation Observatory of the Spanish Youth Council (CJE), only 17.3% of the population between the ages of 16 and 29 is emancipated.
This pioneering plan in the sector will be carried out through Santander SmartBank, the bank’s youth banking model, which through its new Youth Mortgage will allow people under 35 to buy their first home, providing less initial savings than is usually necessary to access to a mortgage product and that is usually 20%. Specifically, the initiative contemplates the financing of up to 95% of the lower value between appraisal and sale (LTV) for standard mortgages at a variable or fixed rate and a maximum repayment term of 30 years.
This represents a clear entry opportunity for young people, since, at the end of 2020, loans that exceed 80% barely represented 15% of the total mortgage portfolio of the main Spanish entities and most of them are product contracted before the 2008 crisis,
Santander will also finance foreign products and grant mortgages for both new-build housing and second-hand products
Thus, in recent years, entities have only occasionally offered financing of more than 80% of the value of the home as long as it was a property that was part of their portfolio. This is precisely another of the differential characteristics of the new Youth Mortgage, since Santander will also finance external products and grant mortgages for both new-build housing and second-hand products, provided they are going to be the buyer’s habitual residence.
To acquire this product it will be necessary to provide a personal guarantee, the value of which will depend on the amount of the operation, which will expire five years from the formalization of the mortgage. On the entity’s website, customers and non-customers will have all the information on the product together with a simulator to facilitate the calculation of their quotas.
In order to grant these mortgages, the bank will carry out a risk analysis and a financial scoring to the clients, to whom the standard effort limitation on payroll will be applied, which according to market consensus should not exceed 33% in general terms. , a percentage that can vary by a few percentage points depending on the entity and each client in particular.
Get ahead of the Administration
With this new product, Ana Botín hits the table and launches a plan that has been suing the Administration for months. Thus, the president of the bank said that government support for young people was necessary, promoting access to the residential market, not only through rental, but also through purchase.
Botín’s proposal, which was based on replicating models that have worked successfully in other countries such as the United Kingdom, where the Help to Buy program was implemented, involved a public-private collaboration model in which the entity granted mortgages at 95 % of the amount to young people, who would have State guarantees of up to 20% of the operation to promote the sale and purchase of homes in this group.
From the Ministry of Economy they recognized at the time that they had received this proposal, not only from the banking sector, and that it was on the ICO table. Although, the institute pointed out that for them at that time, in which they were focused on saving companies, especially the self-employed and SMEs.
Launch the Payroll Campaign
In addition to this new mortgage product for young people, Santander SmartBank, which last January reached one million customers or Smarters, is launching a new campaign with up to 100 euros gross as a gift for the direct debit of new payrolls and which will be valid until 30 of June. New customers only have to be account holders at the Bank, direct deposit their payroll for at least 12 months and sign up for the campaign. With these steps, you will receive your incentive in your account.
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