Spanish Banks Approve 19% More Mortgages In June

27/08/2014 – El Economista

According to the National Institute of Statistics (or INE by its acronym in Spanish), new mortgage approvals rose by 19 per cent in year-on-year terms and this is the second time it has increased in the past four years. First, the rate improved in March with a 2% rebound.

Specifically, the number of new mortgages signed in June was 17.137 contracts, which is far behind the 56.000 agreements sealed four years ago. Moreover, in comparison to the previous month, their number fell by 4.6%.

In spite of the optimistic fact that this is the best year-on-year improvement since March 2006, portal asks for cautiousness in celebrating as the calculations are based on the mortgage registry which usually updates with a two or three month delay after the deed.

There is also the bad news: banks raised the differential rates. Still, it remains to be seen whether or not the increase was an isolated case in the downward tendency observed over the past months. To portray, interest rate in mortgages went up to 3.88% in June, while in May it stood at 3.82%.

As of the INE´s data, 92.9% of the mortgages approved in June was of variable rate and only 7.1% of the total was fixed.

In 87.9% of the cases the Euribor was the basis for the variable rate.

The Average Amount

In June, the loans averaged at 98.582 Euros, meaning a 1.3% rise year-on-year. The total amount lent by banks reached €1.69 billion, by 20% greater than in June 2013 but by 5.2% smaller than in March 2014.

Speaking of the regions of Spain, the biggest number of mortgages was approved in the Community of Madrid (3.841 contracts), Andalusia (2.900) and Catalonia (2.435).

On the other hand, this kind of loans declined in Aragon (-19.3%), La Rioja (-5.8%) and Andalusia (-3.3%).

If it comes to the annual change rates, they most fluctuated in June in Galicia (92.5%), Extremadura (66%) and Navarre (64.9%).

Finally, the regions with the highest amounts lent were Madrid (€471.3 million in total), Catalonia (€268 million) and Andalusia (€238.9 million).

Original article: El Economista (after Efe)

Translation: AURA REE