October 25, 2020

The signing of mortgages for housing falls in July for the fifth month, 23%


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The signing of new mortgages for the acquisition of a home chained in July its fifth consecutive year-on-year decline, 23%, in the first full month in which there were no confinement measures, with 26,014 registered contracts.

The average amount of a mortgage to acquire a home increased, by contrast, by almost 9%, up to 132,346 euros, while the capital lent by entities stood at 3,442.8 million euros after falling 16.1% year-on-year, according to data published this Monday by the National Institute of Statistics (INE).

In the first seven months of 2020, the number of mortgages to buy a home has fallen by 10.5% and the capital borrowed has fallen by 2.5%.

More than half of the contracts signed in July, 52.5%, opted for a fixed interest rate vs. 47.5% who preferred the variable, with which the first option is once again above 50%, the same as in four of the five previous months, except for June, when the percentage was 49.6%.

It should be remembered that these figures refer to mortgages registered in the Property Registries, so they reflect the contracts signed in previous months, in a state of alarm due to the coronavirus.

In this way, in July, the average mortgage to buy a home had an amount of 132,346 euros, an interest rate of 2.54% and a repayment term of 23 years, according to the INE.

The total number of properties mortgaged for any use fell by 20.4%, double that of the previous month, and stood at 37,023, while the total capital loaned fell 7.1%, to 6,209.7 million euros, both compared to July 2019.

The average amount of mortgages on the total number of properties registered in the property registers in July (from public deeds carried out previously) was 167,728 euros, 16.7% more than in the same month of 2019.

By nature of the estate, the mortgages constituted on houses they concentrate 55.5% of the total capital lent, compared to 62.4% the previous month.

For home mortgages, the average interest rate was 2.54% and the average term was 23 years. 47.5% of these contracts were established at a variable rate and 52.5% at a fixed rate. The average interest rate at the beginning is 2.27% for mortgages on variable rate homes and 2.86% for fixed rate mortgages, explains the INE.

The total number of mortgages registered in the property registers due to a change in their conditions stood at 8,051 in July, 36.2% more than a year earlier, of which 6,389 were novations (or modifications agreed with the same entity financial), 38.1% more.

By autonomous communities, those that constituted the highest number of mortgages on homes in July were Andalusia (4,598), Catalonia (4,400) and Community of Madrid (3,833).

The communities in which the most capital was loaned for the constitution of mortgages on homes were Madrid, with 733.7 million euros, followed by Catalonia (732.2 million) and Andalusia (608.4 million).

The only Autonomous Community with a positive annual variation in borrowed capital was the Basque Country (32.6%), while the greatest decreases were registered in Castilla-La Mancha (44.5%); Galicia (33.6%) and Cantabria (33.2%).

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