The home mortgage firm reached levels not seen in the last twelve years in 2022. According to data published this Thursday by the National Institute of Statistics (INE), Last year, 463,614 mortgage loans were granted in Spain, 10.9% more than in 2021 and the highest figure since 2010. The market withstood the pull, with a shift towards variable mortgages, despite the increase in prices and the rise in interest rates by the European Central Bank (ECB), although the end of the year suggests a slowdown in the signing of mortgage loans.
You have to go back to 2010 to find a year in which more mortgages were signed than in 2022. At that time, the total number of concessions reached 607,535, in a declining market after the real estate bubble, which made it possible for 2006 1.34 million signatures will be registered. The situation in recent years is completely different. The mortgage firm chains two consecutive promotion exercises, after in 2021 the market recovered from the 6.5% drop in 2020 with a growth of 23.78%. The pandemic had previously broken the upward trend of the previous six years, since mortgages bottomed out in 2013.
However, December has truncated the positive data of the preceding months, putting a bitter end to a historic year. In the last month of the year, 30,075 mortgages were signed, which is 23.48% less than in November, month in which 39,304 mortgage loans were constituted, and 8.82% less than in the same period of 2021. This is the first year-on-year drop after twenty-one months of increases and the most pronounced for a month of December since 2013, except for the pandemic year. “The signature data is no longer as bulky as in previous months, it reflects a slowdown in the haste of citizens to avoid the tightening of loans,” said the Director of Studies at Fotocasa, María Matos.
In this way, the mortgage firm seems to be beginning to suffer from the rises in interest rates undertaken by the European Central Bank (ECB) from the second half of 2022, which have been transferred to the Euribor, the reference index for the majority of variable mortgages in Spain. “In December the Euribor already reached 3%, and therefore Buyers’ negotiations with banks became increasingly complicated”recognizes Matos.
In fact, according to data published this Thursday, The average interest rate at which mortgages were established at the end of 2022 stood at 2.67%, the highest since January 2018. Specifically, the average rate on fixed mortgages stood at 2.93% and the variable rate at 2.18%, compared to the 2.64% and 2.06% registered in June, just before the ECB will announce the first rate hike. Even so, on an annual average the variable decreased in 2022 by one tenth compared to 2.18% in 2021.
Predominance of fixed mortgages
Parallel to the rise in rates, in the last six months there has been a boom in variable mortgages, which, although they are still in the minority, have gained ground over fixed ones. In December, variable-rate loans represented 34.5% of all firms, compared to 24.6% in July. It is there where, according to Matos, “the greatest change in the cycle” is detected. Fixed mortgages have receded due to the change in banking conditions.
“Many families prefer to close a mortgage at a fixed rate than face a possible increase in the cost of the installment in the future. However, the strategy of financial institutions to lower the price of variable mortgages and harden fixed onesit is already having results”, explains the director of Studies at Fotocasa. However, the trend of the last half of the year does not prevent the percentage of fixed mortgages from rising to 70.9% in 2022 as a whole, the data highest in the historical series, since 2003.
For his part, the amount of mortgages rose 5.8% in the last year, to an average of 145,510 euros for loans, the highest value since 2007. In total, the loaned capital increased by 17.3%, to exceed 67,460 million euros. In the month of December alone, loans worth 4,326 million euros were granted, a volume 9.2% lower than that of December 2021.