The mortgage firm grows 18% and is at an eleven-year high

The signature of home mortgages increased by 18% in March compared to the same month of 2021, reaching 43,378 operations, the highest figure since February 2011 and the highest in a month of March since 2010, when more than 54,000 were signed mortgages.

Thomas Osborne
Thomas Osborne
27 May 2022 Friday 15:55
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The mortgage firm grows 18% and is at an eleven-year high

The signature of home mortgages increased by 18% in March compared to the same month of 2021, reaching 43,378 operations, the highest figure since February 2011 and the highest in a month of March since 2010, when more than 54,000 were signed mortgages.

According to data published yesterday by the National Institute of Statistics (INE), the accumulated increase so far this year stands at 20.2%. With March, the home mortgage firm has chained thirteen consecutive months of year-on-year increases.

March was the last month that closed with a negative Euribor, of -0.237%, but the prospect of a rate hike, which has been materializing, was one of the factors that triggered operations, which in many cases were the signing of fixed-rate mortgages to replace the variable-rate ones that 90% of Spanish mortgage holders still have. Mortgage conditions were changed in 12,888 homes (novations and subrogations), 16% more than last month's figure.

According to data from the INE, the average amount of mortgages increased by 6.5% compared to March last year, to 145,715 euros, while the borrowed capital grew by 25.6%, to 6,320.8 million euros , its highest figure since February 2020, just before the covid pandemic was declared. In the accumulated figure for the first quarter, the average amount of loans increased by 7.7%.

Juan Villén, director of the Idealista portal's mortgage department, points out that “the increase in average amounts is a clear reflection of the rise in housing prices”. Villén also highlights "the strong increase in mortgage cancellations, which in many cases really correspond to changes of bank, because many customers are changing variable mortgages to fixed ones, to protect themselves from increases in interest rates."

In March, the average interest rate on home mortgages was 2.53%, up from 2.47% a year earlier, with an average term of 25 years. 72.7% of the mortgages were signed at a fixed rate. March is the third consecutive month in which fixed loans exceed 70%, despite the fact that their interest rate was 2.68%, above 2.15% for variable rate mortgages that subscribed 27.3% of the creditors.

The rise in the Euribor, which yesterday stood at 0.36%, its highest level since 2014 after returning to positive rates in April, places an uncertain scenario on mortgage financing. "Banking entities can already begin to make fixed mortgages more expensive" to stop the transfer of their variable credits, warns María Matos, Director of Studies and Spokesperson for Fotocasa.

Ferran Font, director of studies at Pisos.com, recalled that the increase in the granting of mortgages reflects the vitality that the real estate sector is experiencing "waiting to see what the long-term effects of other aspects will be, such as the advance of the invasion of Ukraine by Russia or the changes in the monetary policy of the ECB”.

Thus, in a market that in March was led by the tourist communities due to the return of foreign buyers, these communities have also stood out for the increase in mortgages, led by the Canary Islands (37.6%) the Balearic Islands (36.8%) and Andalusia (30.7%). The strong weight of the first home in Catalonia and Madrid has meant that both communities have increases below the average, with 13.3% in the Principality and 7.8% in Madrid. All in all, the greatest increases occurred in La Rioja (55.2%) and Aragón (51.4%), driven by the transfer to fixed-rate mortgages, and Galicia closed the table, where the granting of mortgages fell by 3.9%.