Mortgages in Spain July 2023
For another consecutive month the Spanish loan levels drop July 2023. The market has decreased again.
Since the beginning of the year, which started bright, each month levels have been down month on month. Also over same month of last year.
Interest rates impact on Spanish mortgage completions
As interest rates have risen new lending has been under pressure. After a couple of years of net inflows to their loan books, Spanish Banks are experiencing outflows.
In total 29.223 loans in Spain were completed. However 34.781 existing loans in Spain were cancelled.
Spanish Banks negotiate on rates
I an effort to keep up activity, lenders are negotiating a little on rate. From an average of 2% above Euribor. For non resident lending. Now Banks are generally offering 1.5%. Given Euribors are 4% this means variable rates are circa 5.5%.
Fixed rates can still be gained at around 4%. Fixed for the whole term.
There are also a couple of Spanish Banks offering mixed mortgage rate product types. This provides shorter term fixes 3 to 5 years. Followed by variable for remaining term. Allowing for those going through the application in Spain to protect against current volatility. Whilst taking advantage of future rate drops.
In July the total amount of new loans in Spain was 29.223. This was a decrease of 12.7% over June. Down 18.8% over July last year. Also down 14.4% year to date.
Capital lent in Spain was down 12.9% over June. Down 20.9% over July last year. Down 15.8% year to date.
The average loan size also dipped in month. At € 143.412 this was down 0.3% over last month. A decrease of 2.6% over July last year. Finally down 1.6% year to date.
Whilst the lending levels remain the doldrums, as Spanish loan levels drop in July 2023. July is normally lower than Junes figures. Therefore normal annual trends still appear to be being followed.
Interest rates continue to rise. The average rate for the month was reported at 3.24%.
How this is possible, given the Euribor is higher than that, remains a mystery of the INE statical reporting.
Variable versus fixed rates
42.2% of all new lending completed on a variable basis. 57.8% on a fixed rate basis.
The average variable rate was 2.95%, for this to be accurate the Spanish Banks would have to be lending at below the Euribor rate. Fixed rates over a 25 year term were 3.49%.
In reality borrowers can expect pay 5.5% for variable rate and 4% for a long term fix.
12 month Euribor stabilises
In September the 12 month Euribor edged down slightly. However in September the ECB increased the rates by 25%. Whilst they stated this will be the last increase for foreseeable future it is unlikely the Euribor will decrease again in October.
Non resident lending in Spain is very tight at the moment. Firstly enquiries are significantly down. Secondly Spanish lenders remain cautious from a risk perspective at this point in time.
Independent advice for Spanish mortgages
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