March lending figures down on February
Whilst year on year for the first three months of 2016 lending levels of Mortgages in Spain are up on 2015 in March the rate of increase slowed and across both numbers of and capital lent when assessing the data against February.
The trend of lower loan levels in March is normal but with the housing market appearing to be recovering and Spanish Banks being eager to lend it is slightly surprising we are not seeing month on month increases.
Fixed rates
For 2016 the momentum for fixed rates being chosen as the mortgage product type by applicants is continuing. Each month the share of new loans being completed on a fixed rate basis increases. Whilst from very low levels the increases are significant and show a marked change in the market. All Spanish Banks are now pushing and providing access to fixed rates.
Lack of clarity around early redemption penalties for some lenders will hold back this trend but in general the fixed rate market looks to be a good medium to long term bet.
Average Interest rates
Average interest rates fell in March due partly to the move to fixed rates and a drop in Euribor over the last couple of months. Whilst still in negative territory for May there was a very small increase the first increase in many months.
Mortgage books
For yet another month the amount of loans being cancelled outstripped new loans being constituted. After many years of actively reducing their loan exposure Spanish Banks will remain concerned about future earnings until this trend can be reversed. Currently there appears to be no end in site with only one month in the last 6 years showing a net gain. Pressure on earnings form this area and the environment of low interest rates means the lenders have to up their game in cost efficeincy and further mergers may be seen this year.
Read the full article:- Loans in Spain for March fall over February
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