Mortgage Approvals Dip Down Again & Slide 13.4% YOY in April. Rates Shrink by 4%

27/06/2014 – Expansion & Cinco Dias

According to the National Institute of Statistics (or INE by its acronym in Spanish), new mortgage signing came back on the downward route and fell by 13.4% year-on-year in April after climbing 2% in March and thereby bringing the first positive news in the last 4 years.

During the month of April, 15.326 new mortgages got signed. It is by 7.8% less than four weeks earlier. The figures have been obviously influenced by Easter, befalling this year in April, while in 2013 in March. Moreover, the information available inclines us towards recognition that the data also involves the previous months, in case of the year 2013, those following the tax relief removal at the end of 2012.

The total amount lent declined to 1.538,64 million Euros, by 8% less than in March and by 9.6% less than in March 2013.

In turn, average amount borrowed via the loans for house purchase fixed at €100.394 in April, by 6% more than a year earlier and by 2% less than the €102.397 mean from March, which almost has not changed over February.

About 93% of the mortgages approved in April applied variable interest rate, while only 6.9% used the fixed rate. The Euribor is the most popular benchmark rate for variable new contracts (87.5% of them).

Average interest rate for all properties post 3.84%, lent for 21 years on average. Mean interest rate for mortgages for homes sat at 3.97%, by 8% smaller than in April 2013. It is the fifth consecutive fall. To compare, in November the average rate marked 4.29%.

Talking about Spanish regions, the most new mortgages were granted in April in Andalusia (2.760), Catalonia (2.489) and Madrid (2.359).

On the other hand, fourteen regions signed less mortgages in year-on-year terms with the biggest differences in Murcia (-29.6%) and Andalusia (-22.8%). The only jumps were registered in La Rioja (+80.2%), Navarra (+67.7%) and the Canaries (+9.7%).

The biggest amounts of money borrowed for home purchase piled up in the Community of Madrid (€320.3 million), Catalonia (€302.7 million) and Andalusia (€245.5 million). 


Original article: Expansión & Cinco Días

Translation: AURA REE