2023-06-23 06:49:49
The percentage of mortgages constituted in April at a fixed rate was 61%, 14 points lower than the maximum registered last July
The initial average interest rate for mortgage loans was above 3%, the highest level since 2017
The Euribor is already close to 4% in the monthly rate, which means that the installments of the variable mortgages will become more expensive by 40% year-on-year
The percentage of mortgages constituted at a fixed rate stood last April at 61.3%, It is the lowest level since the same month of 2021, when it was close to 59%, according to data from the Mortgage survey published by the INE this Thursday. Then the gap began to widen between the loans to acquire a home that were signed at a fixed rate and those that were at a variable rate.
The first came to account for more than three quarters of the total last July. Since then, coinciding with the beginning of the interest rate hikes carried out by the European Central Bank, the percentage of these has been reduced by more than 14 points.
Since 2016, when the Euribor entered negative territory, banks had favored the contracting of fixed-rate mortgages as it was the best alternative for their business, but the rise of this indicator, a reference for variable-rate loans that is already close to 4% in its monthly rate, has caused a complete change in trend.
“The strategy of financial institutions to lower the price of variable mortgages and harden fixed ones is already having results. Those of these months will be practically the last credits that are signed at a fixed rate and it is expected that there will be an even more pronounced change in the trend. We are already seeing how varieties such as mixed mortgages emerge, which is becoming the star product of banks, ”says María Matos, director of Studies at Fotocasa.
In these mortgage loans that are recording strong growth in recent months (they explain the increase in those signed at a variable rate since the INE records them with these), the payment of a installment at a fixed interest rate during the first yearsthey can be 3, 5 or 10, with a variable rate that is applied to the rest until maturity.
For mortgages constituted last April, the average interest was 3.09%above 1.77% from a year earlier and represents the highest level since April 2017. The average interest rate at the beginning was 2.78% for variable rate mortgages and 3.29% in the case of the fixed rate.
drop in mortgage activity
The resurgence of variable mortgages is just one of many effects that rising interest rates are having on the market. The most important is the one that indicates that the number of operations is plummeting compared to what happened last year. The INE figures suggest that in April there was a year-on-year decrease of 18%, the third consecutive drop.
These data confirm those already advanced by the General Council of Notaries, which move the trends of the real estate market with less delay, and which show a decrease in that same month of 32% after five months of setbacks. In addition, this statistic also points to the fact that a decrease in the average amount of mortgage loanswhich in April reached 142,300 euros, 6.5% lower than that of a year earlier.
“The drop in the average mortgage amount is based, on the one hand, on the need to adjust the requested amount to the installments that can be paid and, on the other, on the greater drop in the number of loans in provinces with a housing price higher, as is the case in Catalonia, the Balearic Islands or Madrid”, explains Juan Villén, director of idealista/hipotecas.
This expert predicts that the downward adjustment that has been taking place since the beginning of the year will last, at least, until the end of the summer. “The rise in rates has a lot of weight in these results since it drives families and young people with lower incomes out of the market, who cannot afford mortgage payments that grow well above wages.”
More than 3,000 euros extra mortgage
The latest rise in interest rates approved last Thursday by the European Central Bank to fight inflation has pushed the Euribor, the reference indicator for variable mortgages, to 4% in its daily rate, something that had not happened since the end of 2008.
If it reaches that level in the monthly average for June, it will mean that the mortgages that are reviewed with that data will have to face a rise in monthly installments of 168 euros for every 100,000 mortgage loan, according to Asufin estimates. It means that an average mortgage of 150,000 euros, at 25 years and with a differential of Euribor+1%, will have to face an increase of 252 euros per month.
In annual calculation, the increase for every 100,000 euros will amount to almost 2,020 euros; so that same average mortgage loan will become more expensive with the rise in rates by 3,030 euros compared to what was paid the previous year. If the rise is added accumulated since 2021, the increase reaches 4,135 euros per year.
Despite these sharp increases, which have a significant impact on the economies of the 3.7 million variable-rate mortgagees in Spain, the banking sector points out that an increase in delinquency is not being detected. “The delinquency levels are at historic lows, but that does not mean that we are aware of the needs of our customers,” said José Ignacio Goirigolzarri, president of CaixaBank, on Tuesday at the APIE course held in Santander, highlighting the good functioning of the code of good practices approved by the Government to help those with mortgages.
An opinion that is not shared by the second vice president of the Government and leader of Sumar, Yolanda Díaz, who has announced that she will carry a emergency bonus of 1,000 euros for those mortgaged in distress due to the rise in rates, and which would benefit loans of less than 250,000 euros signed since 2013.
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