The mortgage market closed in August with another negative month in Spain. According to the INE, in the eighth month of the year, 28,344 loans for the purchase of housing were registered throughout Spain, 22.7% less year-on-year and the second lowest figure since January 2021, only surpassed by last April.
However, in the Canary Islands, where foreign demand continues to increase, the number of mortgages contracted continues to increase and reached 11.8% in August. Also the capital lent that grew by 3.9%. In the rest of the State only in Murcia they grew slightly (4%), according to the real estate portal idealista.com.
The signing of mortgages accumulates seven consecutive months of decreases in Spain and the last six have been two-digit drops. After the result of August, so far this year registered mortgages are down 15.4%.
The decreases have also been imposed on the capital lent by banks for the purchase of housing, as well as on the average amount of mortgages. According to the statistics agency, the average amount of mortgages constituted on homes fell by 4.6% year-on-year in the eighth month of the year, to 138,171 euros, while the capital lent decreased by 26.2%, to almost 3,916.3 million euros.
Mortgages increasingly expensive
What does maintain the upward trend is the average interest rate of mortgages, driven by the interest rate hike policy carried out by the European Central Bank (ECB) to try to contain inflation. Specifically, the average interest rate has remained in August at 3.25%, compared to 3.24% previously, marking its highest value since July 2016.
Compared to a year earlier, the average interest rate for housing loans has increased by 1.3 points. It is the fifth consecutive month in which the interest rate exceeds 3%.
With regard to the type of mortgage, the INE affirms that 42.1% of mortgages on homes were constituted last August at a variable rate (modality that includes variable mortgages such as mixed ones) while 57.9% were signed at a fixed rate.
Although they still represent more than half of the signatures, they remain far from the historical highs of summer 2022, thus confirming the trend of their loss of momentum in the face of the impulse of mixed mortgages.
