The cooling of the housing market is a fact and the collapse in the number of mortgages granted is the greatest reflection. The number of loans for homes granted by banks fell by 15.7% last March compared to the same month of 2022, to add 36,182 loans.
The impact of the rate hike by the European Central Bank and the effects of inflation on the pockets of buyers begins to make a dent in the mortgage market, which in recent months has seen a decline in demand even above what the entities themselves had expected.
With the year-on-year decrease in March, the firm of mortgages on homes chains two months of negative rates after the fall of 2% that was recorded in February, according to data released this Friday by the National Institute of Statistics (INE).
After the rise in interest rates agreed by central banks to try to contain inflation, the average interest rate for mortgages stood at 2.99%, its highest value since April 2017, with an average term of 25 years.
Fixed mortgages are still the majority, but their proportion with respect to the variables decreases considerably after a year ago it stood at maximums around 75%. The tendency of banks to restrict fixed-rate credit means that variable mortgages and mixed mortgages – which are statistically counted as variable – are increasingly important in the mortgage portfolio.
Thus, 36.1% of mortgages on homes were constituted last March at a variable rate, while 63.9% were signed at a fixed rate. The average interest rate at the beginning was 2.72% for mortgages on variable-rate homes and 3.15% in the case of fixed-rate mortgages.
The average amount of mortgages constituted on homes fell by 1.5% year-on-year in the third month of the year, to 142,663 euros, while borrowed capital decreased by 17%, to 5,161.8 million euros
- Housing
- Mortgages
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