Mortgage activity in Spain

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June loan data in Spain

Junes Spanish mortgage data continued in general, the move on from Mays reporting.

Whilst the increases were not so high in June both numbers of and capital lent for the purpose of buying a home showed a year on year and month on month increase.

Average loan amounts edged up slightly from the same month of the previous year to € 116.6 from € 115.5 and increased by 16.5% over Mays average loan size.

New lending for homes

The number of new home loans registered at land registry totaled 29,516 and was a small level above the amount of home loans cancelled or redeemed within the month. 29,340 existing credits went off the books in the month leaving a net book surplus of 176 mortgages. Whilst a very small number this is only the third month in over 7 years that the Banks in Spain have had a net surplus.

Annually the number of new loans is up 8% and capital lent 14.8%. The average loan size is 6.2% up.

The percentage of all lending that was designated for the purpose of residential lending was 64.4% in June this was a big increase on May and Aprils figures where lending for houses dropped below 55% of all new credit.

When comparing the month on month increases so June over May for both numbers of new loans and capital lent against a 5 year trend apart from the year of 2015 it is normal for loans to drop month over month so the increase can be seen as positive for the market.

Junes numbers of loans over May were up 1.7% and capital lent, due to an increase in the average loan size, was up 4.4%. This compares to last year when numbers dropped over the month by 4.6% and capital lent only increased by 0.9%.

Fixed rates total percentage of borrowing drops

The flow of new lending toward fixed rates as a product type has stalled a little in the last couple of months. This may be due to most lenders increasing their long term fixed rates slightly and the fact the Euribor continues to decrease each month. The continuing decrease in Euribor may be encouraging applicants to take a variable rate as the variable is currently below the best of the fixed.

This view may be rather short term as over a 20 year period it is difficult to envisage a fixed rate would not benefit the borrower over a variable tracker.

Fixed rates made up 37.8% of all mortgages in Spain in June in comparison to 38.7% in May.

The average fixed rate interest was 3.18% in June compared to 3.06% in May and the average variable was 2.60% giving an overall average interest rate of 2.79% for the month. This was down from 2.79% in May and 3.19% in May of 2016.

Canary Islands see large increases in level of loans

Regionally most areas are seeing increases over last year and month on month.

The Canary Islands was up 34.2% on numbers of new loans in June and 59.8% up on capital lent making it the biggest percentage increaser from all regions.

The Balearics is showing numbers down annually, but capital lent up so the average loan size has increased there significantly.

Murcia saw lending drop month over month but is up year on year. Other regions that had a bad June included Cataluna and Valencia although again both are showing good year on year increases.

All regions with a high level of non resident activity show healthy month on month and year on year increases.

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