Home Mortgages Rose by 28.8% Year-on-Year in July

ORIGINAL ARTICLE FROM KYERO https://news.kyero.com/2014/10/home-mortgages-rose-by-28-8-year-on-year-in-july/15487

According to the latest data published by the National Institute of Statistics on Friday, the number of new home mortgages increased for the second consecutive month in July. Specifically, during the seventh month of the year, a total of 18,107 home loans were signed, which is an increase of 28.8% over the same period in 2013, and an even greater increase than that registered in June (+19%). The Institute points out that these figures come from deeds carried out in previous months.

This is the largest positive percentage registered for some time and highlights a clear improvement in the housing market. As all the experts have suggested, this recovery is due to the reopening of credit and seems to be already underway thanks mainly to the new ‘trade war’ that seems to have started again between banks in order to attract customers.

The average value of the home mortgages reached 100,866 euros in July, which is 0.3% less than the same month of 2013, while the capital loaned increased by 28.5% year-on-year, to 1,826.3 million euros.

Month-on-month (July over June), home mortgages increased by 5.7%, representing the biggest rise in this month of the last five years. The amount of capital loaned for home mortgages also experienced a monthly increase, of 8.1%, registering its biggest monthly increase since 2010.

Despite the increase in mortgages, in the first seven months of 2014, the number of mortgaged homes has fallen by 9.4% over the same period in 2013, with a drop of 8.2% in the capital loaned and an increase of 1.3% in the average mortgage value.

By region, those which registered the highest number of home mortgages in July were Andalucía (3,324), Madrid (3,247) and Catalonia (2,878). Only two regions registered a lower number of home loans than in the same month of 2013 – Castilla y León (-11.7%) and Galicia (-0.6%) – while the remaining regions recorded positive annual rates, with the biggest increases being those registered for Asturias (+114.9%), the Canary Islands (+72.7%) and Cantabria (+64.8%).

The regions where most capital was loaned for the establishment of new home mortgages were Madrid (442.1 million euros), Catalonia (325.5 million) and Andalucía (281.9 million).

According to the statistical agency’s data, during July a total of 27,277 mortgages were constituted on rural and urban properties (homes are included within the latter), which represents an increase of 18.3% compared to 2013.

The average interest rate for mortgage loans on homes in July reached 3.90% against 4.23% registered a year earlier, while the average interest rate for all properties stood at 3.83%, with an average repayment term of 21 years.

El Mundo reported that 93.8% of the new mortgages used a variable interest rate, compared with 6.2% which used a fixed interest rate, and the Euribor is the reference rate most commonly used in the creation of the variable rate mortgages, appearing in 87% of the new contracts.