Mortgage signings hit a new record in July

BarcelonaNonstop. Mortgage issuances again set records in July. In Catalonia, a total of 8,406 transactions were closed, representing a 25.7% increase compared to the previous year, according to data released this Thursday by the National Institute of Statistics (INE). A total of €1,589.85 million in mortgages for home purchases were lent, 40.7% more than a year ago and 22% more than the previous month.

Across the country, 45,067 mortgages were signed, the highest figure for a month of July since 2010 and 25% higher than the same month last year. This marks a total of thirteen months of increases. The average loan amount for home purchases amounted to €163,307, an increase of 7.6%. By autonomous community, the largest increases were seen in Aragon (79.72%), La Rioja (45%), and the Canary Islands (43.40%).

For mortgages on residential properties, the average interest rate was 2.94%, down from 2.99% in June and 3.25% a year ago, and the average term was 25 years. The average initial interest rate was 2.94% for both variable-rate and fixed-rate residential mortgages. The reduction in interest paid by customers is in line, as expected, with the cut in base interest rates implemented by the European Central Bank over the last year, which has pushed down the Euribor, the reference rate for bank loans in the eurozone.

29.9% of the loans were variable-rate, which essentially use the one-year Euribor as a reference, and 70.01% were fixed-rate. This trend is compounded by a supply that is unable to meet existing demand, pushing up housing prices. In fact, the increase in mortgage signings is occurring in a context of lower interest rates, which makes access to financing for home purchases more expensive, and in the context of the perpetual imbalance between supply and demand.

The total number of mortgages with changes in terms registered in the property registries fell by 2.0% in July year-on-year. Novations (or modifications with the financial institution itself) decreased by 12.6%, and subrogations to the creditor (change of entity) by 41.0%. In contrast, subrogations to the debtor (change of loan holder) increased by 89.1%. 77.6% of the 13,286 mortgages with changes in terms were due to changes in interest rates.