MORTGAGE contracts signed for buying new residential property have risen by 41.2%, according to the most recent figures – the highest increase since December 2019, three months before the Covid-19 pandemic hit Europe, according to the National Statistics Institute (INE).
At present, home loan figures for the last full month only go up to the end of June, with July not yet released and August still to conclude.
But in June alone, a total of 37,961 new mortgages were signed for – not including remortgages or extensions to existing ones – being a rise of well over a third and not far off half the figure in the same month in 2020.
The amount of capital borrowed also increased, by 49%, with the average loan rising to €140,456 – the biggest since February 2020.
June 2021 was the fourth consecutive month where the total amount borrowed was more than 40% above that of the same months in 2020.
Year on year, the number of mortgages taken out in the first half of 2021 was 11.2% higher than in the first six months of 2020, and the total capital borrowed was 12% more than over the same period last year.
Variable-rate mortgages were the most requested in June, although fixed rates were mainly sought between January to April inclusive.
Low Eurozone interest brings hike in variable-rate loans
Spanish mortgages are linked to the Eurozone interest rate, or Euribor, which has been in negative figures since February 2016 – a deliberate strategy on the part of the Central European Bank (BCE) to stimulate growth and cashflow across the common currency area, and make it easier and cheaper to obtain finance.
Almost every since that month, five-and-a-half years ago, analysts have been predicting interest rate rises and the end of the 'honeymoon' that has seen monthly mortgage repayments halve, on average, since the worst years of the financial crises.
Read more at thinkSPAIN.com