7/01/2015 – Expansion
At the beginning of 2015, Santander once again stokes the mortgage war as it did a year earlier at this time when the attractive loan offer was scarce, with the real estate market and economy picking up from the ash. The entity improved conditions of its best mortgage loan for home purchase but still, the accessibility path to it is bristled with multiple loyalty products.
Over the last year, Spanish banks have reduced their margins by a half percentage point over the Euribor which showed 0.32% Monday. Thereby, the 2015 forecasts made by the industry are coming true and the new year is set to be troublesome to the banks. Their revenues will be pushed down by low interest rates, small business volume and a fierce competition in capturing solvent customers, causing their spreads to narrow.
The new mortgage of Santander, available by June 30th, allows a 2.45% interest rate for the first year, and a 1.69% rate for the remaining lifetime of the credit. Until now, the bank offered 2.85% and 1.89% ratios respectively. No opening fees are charged and the loan covers 80% of a property’s appraisal value. First-time buyers may enjoy a 30-year term to pay their credit off.
Basically, there are four requirements to be met when applying for the low-interest rate mortgage. Firstly, salaries of the loan holders shall amount to 2000 euros per month. Secondly, three bills shall be deposited each quarter. Thirdly, credit/debit card of Santander shall be used at least three times per quarter. And finally, one shall take out home and life insurances.
The entity has a gross 48 billion euro loan portfolio made up of mortgages to Spanish households, by 4% less than a year earlier. Loans for home purchase represent 10.2% of it.
Santander aims at expanding the portfolio and increasing loyalty of its clients. Its new mortgage approval has skyrocketed by 73% by the end of September. All its loans in Spain add up to 156.4 billion euros. From January to September, the stock rose by 1.6 billion euros.
The mortgage offer modification gives Santander a place among the most desirable creditors in the market, currently led by ING and Deutsche Bank, offering the Euribor plus 1.69% and 1.59% from the second year on respectively. The catch is the set of conditions, like purchase of loyalty products, payment cards, etc.
Returning interest in borrowing calls attention to the profitability of the segment. Among other reasons, the increased dynamics shown by the real estate sector convinces banks the time is right to lend. As per official data, new mortgage approval jumped by 18% in October, linking five months of continuous advance. That month saw 17.687 new loans.
Original story: Expansión (by M. Martínez)
Translation: AURA REE