First month for 2017 lending data.
Beginning of the year for Mortgages in Spain started positively according to the land registry data published by the INE a few days ago.
For loans taken to buy a house the numbers of new credits totaled 27.240 up by 16.9% on January of 2016.
The average loan amount rose by 6.4% against last year and the total capital lent was up by 24.5% at 3.073.858 euros.
When considered against the previous month of December the increases were higher.
Number of new loans increased by 31.3% and capital lent by 31.5%. The average loan size at e 112.844 remained static against December.
Normal borrowing trends.
When looking at a 5 year trend it is normal for Januaries completions to outstrip those of December but the increase month on month was better than the same numbers for 2016 and in line with what happened in 2015. The same was true of capital lent.
The first month of 2017 showed a continuing trend toward mortgagees contracting fixed rate products in favour of variable rate. Whilst variable rate products remain the key product contracted for a mortgage the percentage shift toward fixed rates has been high in the last few months.
Fixed rates surge forward.
Fixed rate products now make up over 35% of all new lending in comparison to less than 10% over a year ago.
Whilst fixed rates remain slightly higher than the variable rates on offer, for both resident and non resident borrowers, the difference is now marginal. Due to the difficulties, lack of any product and cost of re-mortgaging at a later date taking a full term fix is a very viable option at present rates for most borrowers.
Even for non resident buyers of property in Spain who are applying for a Mortgage in Spain can expect fixed rates for up to 20 years from 2.5%.
Spanish Banks have increased substantially their fixed rate offerings and this area is now very competitive.
Average interest rates drop.
Average interest rates for the month were down slightly on December and down by 5.2% on the same month of the previous year where lending related to buying a home. Interest rates however year on year for total credit issued into the market rose suggesting the rate battle for commercial lending which was focus for Spanish Banks last year has abated a little.
Autonomo regions all see lending increase.
Regionally the key regions in Spain all increased in terms of numbers of and capital lent over and above December and January last year.
The Balearics performed exceptionally well against both measures across numbers of and capital lent as a percentage. Madrid and Cataluna were alos well above averages although Madrid whilst up on numbers by 37.4% was only up 32% on capital lent so the average loan size dropped slightly.
Andalucia suffered the same dip in average loan size but remained up in other areas and for the first time ever the amount of new loans in the month was matched exactly by Madrid. Normally Andalucia has a larger number of new loans than any other region but in January both had 5,018.
Murcia, and Valencia were below the average in terms of increases and the lowest increases within the month were in the Canary Islands.
Spanish Banks mortgage books increase for the month.
On a very positive note for the lenders in Spain for only the second month in nearly 10 years new home loans constituted outstripped redemptions. With new applications in process suggesting this may continue.
In total 26,299 loans were cancelled against the 27,240 new loans constituted.