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Home mortgages rose 18% in March, the highest number of 11 years ago

Madrid, May 27 (EFE).- Mortgages constituted on homes in Spain totaled 43,378 last March, 18% above the same month of 2021, and the highest figure since February 2011, which means chaining 13 consecutive months of progress. The data for March confirm the growing trend towards signing fixed-rate mortgages, in a context of rising money prices, although the impact of the rise in the Euribor that occurred in the months of April and May has not yet been felt. In fact, the average interest on fixed-rate loans in March stood at 2.68% at the beginning of the loan’s life, down from 2.86% a year ago. To see the impact of the rise in the Euribor, we will have to wait for the numbers for April, the month in which this credit reference registered its first positive monthly rate since January 2016. THE AVERAGE AMOUNT RISES 6.5%, TO 145,715 EUROS Figures published this Friday by the National Institute of Statistics (INE) show that the average amount of mortgages signed on housing stood at 145,715 euros, 6.5% more than a year earlier, and the borrowed capital reached 6,321 million euros. euros, 25.6% higher than March 2021 The volume of loaned capital is the highest since February 2020, but remains at contained levels, around a third of the maximum reached at the beginning of 2007, in the midst of the bubble real estate. 72.7% CHOOSE A FIXED RATE In March, the growth of mortgages on housing constituted at a fixed rate continued, which already represent 72.7% of the total, with an average interest rate of 2.53% and a term of 25 years , while those signed at a variable rate register an average rate of 2.15%. This shift from variable interest contracts to others at a fixed rate -which begins to occur with more intensity from mid-2021- occurs once the world’s main central banks have already begun to tighten their monetary policies to fight against inflation (the US Federal Reserve has already done it and the European Central Bank will do it in July). The impact of this scenario on the Euribor -the main mortgage reference in the Spanish market- was already noticed in April, when it set a positive monthly average (0.013%) for the first time since January 2016, from -0.477% where it was in January. This change to the fixed rate is also observed in the data on changes in the conditions of loan contracts, so that a quarter of the mortgage novations or subrogations registered in March were made to modify the interest rate. Last March, changes in the conditions of 16,991 mortgage contracts were recorded in the property registries, 39 9% less than a year earlier. Of those almost 17,000 mortgages with changes in their conditions, 24.4% (equivalent to 4,152 contracts) were due to changes in interest rates. Thus, the percentage of fixed rate mortgages increased from 22.9% (before the change) to 48.4% (after), while that of variable rate mortgages decreased from 75.8% to 48.9%. After the modification of conditions, the average interest on loans in fixed-rate mortgages decreased 0.7 points and that of those with a variable rate fell 0.2 points. 57,760 MORTGAGED PROPERTIES The average amount of mortgages on the total number of properties registered in the property registries in March (from public deeds carried out previously) was 154,223 euros, 2.9% higher than in the same month of 2021. Mortgages were signed on 57,760 properties in March, 16.7% more than in that month of 2021, for which the borrowed capital reached 8,908 million euros, a 20.1% increase. For mortgages constituted on all properties in March, the average interest rate at the beginning was 2.56% and the average repayment term was 24 years. 30% were signed at a variable interest rate (an average of 2.79%) and 70% at a fixed rate (2.79% average cost). ANDALUSIA, LEADING IN NUMBER OF MORTGAGES The communities with the highest number of mortgages on homes in March were Andalusia (8,966), Catalonia (7,545) and Madrid (7,308). More capital was lent for the constitution of mortgages on homes in Madrid (1,604.5 million euros), Catalonia (1,245.8 million) and Andalusia (1,097.4 million). For the director of Mortgages at Idealista, Juan VillĂ©n, it is foreseeable that this growth in mortgages will continue until at least the summer and reflects the rise in housing prices. The Director of Studies for the real estate portal piso.com, Ferran Font, agrees that the real estate sector is going through a good time, with more than 30,000 monthly mortgages, but points out that the long-term effects of the invasion of Ukraine or of changes in the monetary policy of the ECB. (c) EFE Agency

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