Thursday, December 9

The war between banks drives the signing of mortgages to record levels

The banking mortgage war, which lowered prices to stimulate operations, continues to positively impact the number of transactions.

Thus, August closed with 33,105 mortgages granted, for the purchase of a house, what it means an increase of 66.9 percent year-on-year and the largest increase since the series began in 2003.

The borrowed capital grew 70.1 percent and chains six months with rates higher than 40 percent.

“This high interannual variation shows the great dynamism that the real estate sector is experiencing and, specifically, the purchase of housing”, explains MarĂ­a Matos, director of Studies and Spokesperson for Fotocasa.

The mortgage war makes operations easier

In new mortgages, fixed interest continues to predominate, with 67 percent, while only 33 percent was at a variable rate.

The average interest rate on mortgages on homes in August was 2.48 percent (2.98 points above the average Euribor for that month, with an average term of 24 years.

“We hope to continue seeing this improvement in mortgage data, since the banking sector has been working to favor this momentum, lowering prices to stimulate sales,” confirms Matos.

Precisely this week ING has lowered the interest on its mixed and fixed rate mortgages by 10 basis points, while the differential on its variable rate mortgages remains below 1 percent.

The fact is that banks, as a consequence of low interest rates, have turned to the only product in which they can generate a certain return, such as mortgages, especially fixed-rate mortgages. Thanks to these loans, a stable income is guaranteed for a long period of time and, in addition, they allow to reinforce a strong bond with the client.

This has allowed many small savers decide to buy a house, an interest that the coronavirus crisis failed to appease.

The 30,000 key operations

With the The month of August is now seven months in which it closes consecutively with more than 30,000 signed mortgages, Month-by-month figures that we had not seen since 2011.

The rhythm is remaining stable and with very positive figures, which could lead Spain to 50,000 house purchase transactions in the coming months.