The Euribor shoots up to 2.78% and makes mortgages more expensive at a higher rate than that registered in the real estate bubble
Those who were planning to
buy a home
this year accelerated the procedures in the summer so as
not to miss the last opportunity to set up a fixed-rate mortgage
, in a context in which the European Central Bank (ECB) is raising interest rates and variable rate mortgages will be more expensive every day.
Therefore, in
August
, a total of
36,721 mortgages
were constituted in the country , 10.5% more than in the same month of the previous year, of which
72% were at a fixed rate.
According to the provisional data collected
by the INE Mortgage Statistics
, published this Wednesday,
for the first time in five years in the month of August more mortgages were signed in July
(2.2% more), since on this occasion, despite to the holidays, buyers were in a hurry to take advantage of the last opportunity of the fixed rate.
Two months later, in October,
it is difficult to find any financial institution that markets mortgages with this interest rate
, as this medium has been able to verify.
This breaks the trend of the last five years according to which in August the mortgage firm fell substantially compared to July: in
2019
, for example, the last year before the pandemic,
39.2% fewer operations were constituted in that month than in July.
Seven out of ten signed mortgages were at
a fixed rate
, with an
average interest rate of 2.71%
for the entire period;
while
variable-rate mortgages
were signed at an
average starting rate of 2.09%
, which is expected to rise.
Most of the variable rate mortgages in Spain are referenced to the
Euribor
, which is already close to 2.8% and which, according to experts, could be around 3%-3.5% next year.
The fever to get a fixed rate was also observed in those who already had a variable rate mortgage and tried to
change their conditions.
It can be seen, however, that the banking entities were much less likely to renegotiate, since for them it is much more profitable for customers to continue at a variable rate, since they will obtain much
greater profitability from margins on interest rates
as the bank central continues to tighten its monetary policy.
For this reason, only a
change of conditions was approved for 10,095 mortgages
,
half that in August 2021
.
Specifically, there were 7,973 novations (or modifications produced with the same financial entity), 54.2% less than the previous year.
The number of subrogations (mortgages that are transferred to another entity) also fell, 38.2% less year-on-year;
while the number of mortgages in which the owner of the home was changed or mortgaged grew by 13.6%.
Expected slowdown in September
The increase in the constitution of mortgages that took place in August, after a month of July that also presented record numbers, will predictably be followed by a
month of September of cooling
of the housing market.
The
Bank of Spain
warned this Tuesday that, according to its Bank Loan Survey, mortgage loans granted in the third quarter of the year (July, August and September) had registered a drop not seen since 2008, hence it is foreseeable that there was a puncture in September.
For the coming months, the supervisor also warned of a
slowdown in the market,
with a
lower supply of credit
- not only mortgages, but also other types of loans - by financial entities in the face of increased risks, and also with a
much weaker demand
from customers, among other things due to higher financing costs.
This Thursday
the ECB is expected to announce a new increase of 75 basis points
in interest rates.
The market is already discounting this increase, but it will closely follow the words of its president,
Christine Lagarde
, on the
outlook for inflation
, since these expectations will be the ones that determine the interest rate at which banks decide to lend and those that will set the Euribor .
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