Spanish loan levels up on last year


Spanish loan levels for February 2020

February Spanish Mortgage figures. As with Januarys, do not as yet reflect the impact of the shutdown in Spain.

Februarys registered loans will mainly reflect completions from late December. Also throughout January.

In total 36,050 new mortgages in Spain were registered at land registry. This is up 16.1% on the same month of last year. Down 8.3% over January 2020. It is normal for Februarys figures to be below January. In fact this was a much lower decrease than the same time last year.

Unusual increase in Spains average loan size

One anomaly in the month was a significant jump in average loan size. The average loan size rose to € 176.206. A 42% increase.

There is no rhyme or reason for this. From the regional figures you can see it has been caused by a steep increase in the Cataluna region. Whether a very large loan.completed in Cataluna. One that has skewed the figures. Or a large development of quality top end houses all came to completion, in the month. It would be anticipated that it is was a one off event. That next month average loan size will drop back into the 125k arena.

Capital lent. Due to the loan size increase was up 64.8% on last year.  And 40.9% on January 2020.

For the two months accumulated. In terms of numbers of new loans the increase is 10.7%. For capital lent plus 30.4%.

New Spanish mortgages for Homes up sharply

Another area seeing a big increase was the level of mortgages in Spain being lent to buy a residence. Normally around the 60% level. February was 69.6% of all new lending contracts. For the purpose of buying a home.

Money lent to developers, to help buy development land only made up 3.6% of all new lending. Which is below the average 5% of last few months.

The split of fixed rate mortgage product type to variable rate contracts held steady at 62.6%.

Interest rates edged up very slightly. With a total average rate of 2.64%. Of which variable was 2.47% and fixed 3.02%.

This average rate was above Januarys figure of 2.55%, Also last years average rate of 2.62%.

Valencias residence mortgages increase

Regionally Valencia was one of the few regions who saw growth over Januarys figures. And year to date. Best performers were Andalucia up 30.9% on numbers of Mortgages.85.4% on capital lent. Cataluna 16% up on numbers, so close to yearly average. However up 181.7% on capital lent due to the large hike in average loan size.

30.159 loans were redeemed in the month. Giving a net inflow to the Spanish Banks lending books of over 5,000.

Impact of COVID 19 in Spain

Next month the figures will start to reflect the situation in Spain. Due to COVID 19. We should see numbers drop considerably. Although completions have still been happening.

As part of the Spanish Lenders response to the Virus. All lenders have been instructed and are now starting to offer existing clients benefits. For those who meet certain parameters. Furloughed or unable to work during this period have the opportunity to move their existing Spanish Loan to interest only. For a period of 6 to 12 months.

Spanish Banks offer customers relief during Virus shutdown

Residents and non residents experiencing short term difficulties should contact their lender. To discuss options. With interest rates so low interest only would reduce significantly the amount payable. Until such a time as it is possible to earn sufficient money to cover the outgoing.

Deferred capital payments will have to be made up at some point. This should be done by way of an extension to the number of months the loan is held. Or after the interest only period over payments would have to increase to get the loan back on track.

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