The mortgage firm grows 13% in October with interest rates still not rising

The mortgage market not only has not slowed down in recent months, but is still growing thanks to the expectation of future interest rate rises, which encourage anticipating operations.

Thomas Osborne
Thomas Osborne
22 December 2022 Thursday 06:36
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The mortgage firm grows 13% in October with interest rates still not rising

The mortgage market not only has not slowed down in recent months, but is still growing thanks to the expectation of future interest rate rises, which encourage anticipating operations. The signatures and the amounts of the mortgages increased to double digits in October, when the average cost of the loans had not yet emerged, according to INE data.

In October, 41,022 new mortgages were signed for the purchase of a home, 13% more than a year earlier, for an average amount of 149,730 euros, 8.4% more. The volume of all subscribed loans amounts to 6,142 million, 23% more.

One of the factors that explains this dynamism is that, at least until October, the cost of mortgages was at similar levels to previous months, despite the fact that in July the ECB raised interest rates for the first time in eleven years and the Euribor began an escalation that has been accentuated in recent weeks.

The average rate of mortgages signed in October was 2.5%, with a term of 24 years. This reference is practically the same as in previous months and is even lower in some cases. The data is important because it reports the real interest at which the contracts are closed and not the one that serves as a reference for the offers of the banks.

Customers are also going en masse to fixed-rate mortgages, in anticipation of interest rate rises in the future. In October, 66.8% of the loans signed were in this modality, while only 33.2% were signed at a variable rate.

This commitment to the fixed rate occurs despite the fact that the cost of a variable mortgage in October was an average of 2.03%, compared to 2.74% for those with the same reference for the entire repayment period.

The ECB has just applied a new rise in interest rates to 2.5% and has anticipated that there will be new increases over the next year accompanied by a liquidity withdrawal plan of 15,000 million euros per year. His decision has affected the Euribor, which is already trading above 3% in daily terms.

The INE also reports the value of the mortgages constituted not only on mortgages, but on all urban properties. In October it increased by 24% and stood at 8,634 million euros. The total number of mortgaged properties was 53,809, 11% more than a year earlier.

By autonomous community, the three with the greatest increase in mortgages signed are Canarias, Aragón and País Vasco. There are three where these contracts fall, which are Castilla-La Mancha, Navarra and Murcia. In Catalonia, the increase data is very similar to the national average.