Mortgages in Spain latest updates

August loan data Spain

August saw in most regions a fall back on average loan sizes and numbers of new loans in Spain.

Whilst in recent years August has performed above July up until a couple of years ago it was normal for August figures to be lower.

New lending is higher than redemptions

As well as new loans decreasing their were less cancellations in the month so the Spanish Banks actually saw a net inflow of new credit within the Month.

Interest rates set to climb

Interest rates continue to creep up although the Euribor is still in negative territory.

Overall we expect rates from the lenders to change in November as they redress the profit margin pressures from the final desicion on AJD tax.

Royal Decree on AJD tax

Whilst the Supreme Court by a narrow amount voted to revert the tax payment back to the borrower the following day the Prime minster used emergency powers to make a Royal Decree and overturning the Courts finding yet again.

From now on mortgage deed tax as a mortgage cost in Spain will be picked up by the Banks this has been enforced by a Royal Decree but will not be retrospective. It is difficult to see who wins here as rates will go up despite a plea from Sanchez for the Banks not to do this.

Read the full article :- August home loan figures Spain

Supreme court in Spain rules on Mortgage deed tax

Confusion reigns in Spain 

The mortgage market was thrown into turmoil last week when a Supreme Court ruled that Banks in Spain should be liable for picking up the cost of Mortgage deed tax called AJD rather than the borrower.

AJD tax who is responsible for paying it

In a reversal of their findings in February 2018, 3 Judges decreed that going forward for mortgages in Spain the lender would be responsible and that back claims for a refund could be made for those who have own the past paid it.

Due to the huge financial implication of this ruling the Spanish Government suspended the decree and asked the Supreme Court to resit and review their own decision.

Impact on the lenders in Spain

As previous loans were granted with interest rates that had a margin that allowed the Banks to make a profit on the lending facility any extra cost that now has to be repaid would put many loans into a loss situation, along with giving the Banks a potential bill of around 24 million.

The Spanish Banks already have made to clear they will challenge any compensation claims and redirect claimants back to the tax office who was the final beneficiary of the income stream.

Will the borrower benefit in the long term 

The rationale for the decision to make the lenders in Spain responsible is somewhat spurious as the tax must be paid if a loan deed is signed at Notary and the only way under current legislation to secure a loan is to have it signed at Notary.

Finally going forward interest rates will be adjusted to take into account the new upfront costs so finally new borrowers are unlikely to gain any long term benefit.

Read the full article Mortgage deed tax in Spain to be or not to be

Spanish home loan news

June and July mortgage data 

June and July saw increases in volume of new loans in Spain and capital left year on year.

The average loan size rose both months and in July it was the highest it has been for quite sometime.

July over June as is the normal seasonal trend saw a small fall back in numbers completed and capital lent despite the increased average loan size.

Spanish Banks start to rebuild books

Spanish Banks experienced a second consecutive month of a net gains to their mortgage books which is positive news after many years of the loan books reducing month on month.

Fixed rates have a surge

Fixed rate best buys saw a small surge in July taking 40.1% of the market. After stabilising around the 35% level this is the first month for a while where fixed rates have taken a higher percentage of all completions.

Average interest rates fell for both months with the variable rate for a 24 year term coming in at 2.36% and fixed rates over the same period reaching 3% for full term. Both are down on last year but the Euribor is now all be it slowly creeping up. The 12 month Euribor remains however in negative territory for yearly revisions and based on 0% by Spanish lenders for new completion.

Madrid improves year on year

Madrid is the star regional performer and for the last two months has in terms of volume beaten Andalusia which is unusual.

Read the full article:- Home loan news for July in Spain

May mortgages Spain

Mortgage levels 

Levels of number of new Spanish loans grew in May in Spain but the average loan size dropped. Whilst still up against May of the previous year the drop from April was significant.

Unusual trends in 2018

At present whilst the overall trend is growth in lending in Spain many normal seasonal expectations are not being met and some of data remains unusual each month when comparing it to the last 5 years.

Fixed rates 

Fixed rates product types took a larger market share in May and topped over 40% of all new contracts.

Fixed rate levels remain good value for money and provide certainty or rate to client in the long term.

Canary Islands has a good month

Canary Islands had a storming month up over 80% on the same month of last year.

Risk assessment changes

Changes to how Banks underwrite moving everything to head office may be encouraging Spanish Nationals to go for pre-approval before they buy.

This means the Spanish Banks pipelines are longer and may account for some of the usual monthly trends.

Read full article:- May average loan size dips in Spain

Spanish mortgages drop for second month

Lending downturn in Spain

Spanish Loans registered at land registry showed a downturn on the previous month for the second month in a row in March.

January Spanish Mortgage levels was very high in comparison to the year before but the market expected this as house sales have increased.

Whilst annually the loan levels in terms of numbers and capital lent are above 2017 this is being eroded each month.

Will political uncertainty have an impact

It is however normal for March to be behind February although tis was to the case in 2017 when March showed a high increase over February activity.

With the uncertainty caused by the no confidence vote for Rajoy it may be that mortgage levels fall back further in the coming months.

Interest rates remain low

Interest rates continue to drop as an average and are very low.

The average fixed rate over 24 years was 3.11% in March and the average variable rate for a 24 year term 2.62.

Fixed rates as a product type have stabilised at around 37% of all new Spanish residential lending after a couple of years of taking a higher market share.

For the first month in a few the Spanish Banks saw a net outflow from their books

Read the full article:- Second month of drop in Mortgage levels in Spain

February lending Spain

Lending in Spain

Mortgages in Spain dropped in February when compared to the previous month.

This was pretty much across the board although a few regions saw small increases.

Madrid had more newly registered home loans in the month than any other region and outperformed Andalusia.

Annually accumulated the figures are still positive and both numbers of, capital lent and average loan sizes were up compared to February of 2017.

Interest rates

Variable and fixed rates dropped in the month.

With lenders under pressure to meet targets fixed rates are being held at very favourable levels.

fixed rates made up over 37% of all completions.

Mortgages for the purpose of buying a home as a percentage off all new credit also was higher in the month than it has bee for a while.

Spanish lenders

Spanish Banks saw a small net outflow of lending within the month after a small gain the previous year.

Non residents going through the application process remain at good levels and areas like the Balearics favoured by second home buyers remain buoyant.

Read the full article :- Lending targets missed in February

New Self Build mortgage in Spain

Construction loans in Spain

Self build or construction loans in Spain have been difficult to achieve since the start of the financial crisis.

This has been due to the much higher risk for Spanish Banks of being left with unsaleable half built property or land in the event of a default.

Not only have they been difficult to achieve but the whole concept of undertaking such a project unless finance was a want rather than a need has been very high.

Self build application process

Banks in Spain will not lend against the land and expect mortgage applicants to have already committed to buying the land and have paid for an Architect to draw up the project and to have applied for the building licences before they would risk assess an application at all.

New product launched

One lender has now launched a product that will allow for the mortgage to be agreed before the land is purchased and will offer up to 40% of the land cost on purchase of the land and up to 70% of the construction cost.

This in itself is much better than other lenders will consider but also means the buyer can get their Spanish mortgage application in process for a self build and underwritten before they commit large sums of money

The mortgage product type is new so as yet untested and is often the case the process may not be as simple as it is outlined but given there are no viable alternatives it is a step in the right direction.

Terms and conditions

Rates and conditions when a loan is approved will match the lenders current best buys for resale purchases so there is no hike in rate for the more risky product.

Read the full article :- Self build lending in Spain

Spanish loans increase in January

January lending data

January loan figures in Spain as published by the INE and from newly registered lending at land registry saw big increases in both number of new new mortgage contracts and capital lent.

Struggling regions see a turn in fortune

Even in regions where the numbers of new loans were lower than December due to the average loan size being greater all regions managed to show an increase in capital lent.

Catalonia who have suffered since midway through 2017 due to the unrest saw massive bounce back in the month both over the previous month and the same month of the previous year.

Murcia who struggled all of last year also had a very good month.

Interest rates drop but there could be pressure coming.

Interest rates for variable rates are down 14% on last year and fixed rates down 5.5%. The euribor held steady in the month at minus 0.191%.

Fixed rates as a percentage of total lending held at 37% which seems to be its natural level. Pressure on fixed rate levels came within the month of March as cost of funds for the Banks in Spain rose so we may see fixed rates moving up shortly.

Spanish Banks have a net inflow of lending for the month.

Net loan inflows

Spanish Banks will have been please to see an increase in numbers of loans being added to the book rather than a month of net outflows and whilst the increase was small never the less it was an increase.

Read the full article:- Good news for Spanish home loans

2017 property sales and loan completions rise for year

December data.

INE data published end of February shows that both new purchases of Spanish homes and Spanish mortgage completions saw a healthy increase for the year of 2017 over 2016.

Mortgages in Spain

Mortgage levels increased for the year and were static in the month of December when looking at the same month of the previous year.

Whilst numbers of were exactly the same a small rise in average loan size over 2016 meant a little more capital was lent.

When looking at loan completions against November 2017 the preceding month there was a marked drop of over 20% less. This is the sharpest drop between these two months in 5 years but could just be a blip.

Interest rates

After a small Euribor increase in February, the Euribor has decreased for March.

Average interest rates were down on the same month of the previous year and fixed rates made up 37% of all new transactions. Fixed rate product types seem to have stabilised at these sort of levels.

A couple of banks in the Month of February increased their long term fixed rates this may adjust itself again in the coming days.

Regional performance

Fir the month the Canaries saw the biggest increases. Generally for the year areas attractive to Foreign buyers saw the greatest growth in both house sales and mortgage loan levels.


Despite increased activity the Spanish Banks still saw a net outflow of lending from their books during the year.

Read the full article:- Spanish year end overview on sales and lending

Loans in Spain numbers fall

New lending figures

The number of new loans in Spain for the month of November 2017 fell against the same month of the year before.

This was probably due to a particularly good month in 2016 when against normal trends completions rose above those of October.

Capital lent increases

Overall the level of capital lent increased as despite the fall in numbers the average loan is up considerably from 2016 and during the year of 2017.

Most regions have seen good increases across the year but Murcia and the Canary Islands have both struggled and without a really good performance in December will finish 2017 down across all measures.

Rates rise slightly

Interes rates whilst climbing a little in the month remain below 2016 levels and fixe rate contracts seem to have levelled out at around the 35% of all new loans taken.

The average rate across all product types was 2.71% for the month down from above 3% this time last year. The 12 month Euribor remains in negative territory as it has done for at least 12 months now.

Spanish Banks pressures remain

Spanish Banks continue to lose clients as mortgages in Spain redeem at a faster rate than than new loans are put on the books but there have been some positive signs that this gap is slowing although in November this was not the case.

Read the full article:- Home loans in Spain are a mixed bag in November

Spanish October home loans drop

October data

Loans in Spain for October saw a drop over the month of September.

This followed normal yearly trends where numbers loans are normally less in this month but there was also a fall in the average loan amount compounding a drop in the capital lent.

Data for the year so October 2017 over 2016 was a much better picture with an increase across the board in terms of numbers of new Spanish loans, capital lent and average loan size.

Fixed rates

Fixed rate product types showed for the first time in a while an increase, whilst the variable rate continued to drop year on year and month on month the fixed rates increased in October. This did not stop 37% of all new transactions being on a fixed rate basis.

Fixed rates for non resident mortgage applicants stayed very stable but the headline rates for residents rose.

Spanish Banks 

Spanish Banks saw a month of net outflows after a couple of months of net inflows. As long as this trend does not continue it should not cause too much concern for the lenders.

Read the full article:- October mortgage statistics in Spain