The mortgage lender suffers from the rise in the Euribor


The number of operations rose 2.3% year-on-year in July, compared to 12% in June and 24.7% in May. 75.4% of the loans are already underwritten at a fixed interest rate

The Spanish mortgage market confirms the symptoms of moderation it has been experiencing since the European Central Bank (ECB) announced the beginning of the end of its expansionary monetary policy. In July, coinciding with the monetary institution’s first rate hike in 11 years, the number of mortgages to buy a home rose 2.3% from the previous year.

It is true that growth maintains a record for this type of operation, which has been on an upward trajectory for 17 months, with a total of 35,918 loans signed in July. But it’s significantly lower compared to the 12% the market grew last month and nearly 25% in May, according to historical data from the National Institute of Statistics (INE). In fact, July’s was the smallest increase since February 2021.

The figure shows the reluctance of future buyers to take out a mortgage, at a time of strong recovery of the Euribor, which since March and April began to anticipate the rise in ECB interest rates, causing the recovery in the market accelerated.

This situation has led banks to remove fixed-rate mortgages from their showcase – or worsen their terms – in an effort to make variable rates more attractive, which they now see a greater chance of doing business with the rise in the Euribor. However, customers are looking for the opposite given the rise in the indicator that most mortgages in Spain are referred to.

According to data from INE, 75.4% of these home loans closed in July 2022 had a fixed interest rate. It is the highest percentage of the entire historical series.

According to statistics, the average interest rate on mortgages to buy a home in July was already 2.50%. As they recall from the institution, the figure represents 1.51 points more than the average Euribor for that month, which was 0.99% (today it trades above 2.4% in the daily rate). The average rate for fixed mortgages was 2.68%, while that for variables was 2.03%.

Source: La Verdad


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