Official figures from the INE on Spanish Mortgages

Levels of new loans granted

the level of mortgages granted in Spain in December 2013 as expected were down for the year on a month by month basis and a total year.

Number of new loans  secured against dwellings fell to 12,329 in December down some 30.1% from the same month of the previuos year.

Whilst siginificantly down on last year December 2012 was a better month for completed new loans skewed by buyers buying in Spain to beat the removal of tax breaks that were withdrawn at the end of 2012.

Average loan sizes also dropped in December to € 101.494

Regional variations

Coastal areas held up better in 2013 than the City areas which is possibly a reflection of who is buying in Spain. Non resident mortgage applications toward the back end of 2013 were higher than the start of year.

In the more resident areas like Madrid new loans garnted fell by more than 50% in the month of December.

Average Interest rates and term

The average interest rate for new loans constituted in December was 4.32% which was around 3.78% above the 12 month Euribor.

The average term over which new loans were granted in December was 20 years.

2013 Full year figures

Spanish Mortgage numbers decreased by 27.8% for the whole year. Given each year for the last 5 years the number of new loans granted have decreased significantly hitting overall decreases each year of 20% or more the levelof lending in Spain is now significantly lower than at their peak and well below historic norms.

The level of mortgages being closed within the month topped the 20,000 level in December meaning we had another consecutive month of a net outflow of mortgage balances from the Spanish Banks books. Not split out is how many of these redeemed mortgages related to Banks taking over the property and how closed due to the loan being paid off in full.

2014 what to expect

2014 should show an improvement in overall levels of mortgages granted. For the first time in many years the Banks have lending targets and we are already seeing a small but not insignificant price war happening where the client wants lower loan to values and has low debt to income ratios.

Read the full article: Loans in Spain official figures for December

Reductions in Spanish mortgage rates

What is happening in the Spanish Mortgage market

In an effort to increase in 2014 the level of Spanish mortgage loans, Spanish Banks  have started to launch new mortgage product and decrease overall rates.

The first area to see a change was in the reduction of the first year premium rates from being above the prevailing variable to offering first year rates that are below the current variables.

Moving on from this trend we are now seeing Banks reduce overall mortgage terms and decrease the margins above Euribor for subsequent years.

Spanish loan pricing 

For the last few years we have seen a regular trend of upward margins above Euribor across the board. Back before the crisis in Spain began margins were in the region of 1.25% for non resdients and as low as 0.50% above for residents of Spain. During the crisis these margins moved to as high as 6% above Euribor for non residents and 4% above for residents.

Gradually over the last few weeks we have seen the pricing drop for both international clients and residents of Spain. Some of the best rates out in the market are now as low as 1.95% above Euribor for fiscal residents and 2% above Euribor for international applicants.

Other Banks who have not reduced standard pricing are now however open to negotiation for quality applications.

Compulsory products

When buying in Spain those clients who require a mortgage will still find the rates offered come with linked products. These linked products will always include life cover which is often added as a lump sum at completion to ensure the cover is not cancelled at a later date.

How long due to new European supervision creeping in Spanish Banks will be able to maintain this practice remains to be seen.

Mortgage applicants should always check the FIPER which is issued at offer to see what linked products they are going to be required to take.

read the full article :http://www.imsmortgages.com/blog/reductions-in-interest-rates-latest-news-for-spanish-loans/