Loans in Spain increase in September 2020

Mortgages in Spain positive for the month

 September saw a big increase in Spanish Mortgage completions in Spain.

Why the uplift

With restrictions lifted during the summer months many delayed home purchases and subsequent mortgage signings were pushed through in the month.

Further restrictions may slow market down

New travel restrictions and Brexit are however dampening current activity so whether October figures will remain positive is yet to be seen. Applicants going through the mortgage application process may diminish

Interest rates remain low

With the EU under pressure interest rates remain low and stable which will may encourage activity and as some of the uncertainty around Brexit and COVID starts to dampen the market may as yet see further uplifts in activity.

Read the full article:-September 2020 Home loan data in Spain

Mortgages in Spain August 2020

 Spanish Mortgage levels reduce 

Like everything else worldwide Mortgages in Spain numbers have taken a tumble in last few weeks.

August 2020 at a glance

First look at initial data for August 2020 does not look too bad but when you look at the steep decrease in 2019, due to new regulation delaying completions, over 2018 the numbers are nearly halved.

Lack not foreign buyers

Tourist regions seem to be worst hit as lack of foreign buyers this year has its impact.

Spanish Banks 

Interest rates are stable and variable rates for first time in many months made up a higher percentage of all transactions.

Spanish Banks have seen first net outflow on their mortgage books for many months.

Read the full article :- Spanish Mortgages take a hit August 2020

Mortgages in Spain for off plan purchases

Buying off plan and raising finance

As the Spanish property market has recovered more and more buyers are looking at off plan purchases which can provide good value for money.

What is the lending process

Issues surrounding finance of this type of purchase do however mean that unless you have the cash to to complete when the deed is ready to be signed or know you can access that cash by other means banking on getting a Spanish loan is a risky business. You cannot secure the loan at outset so after you have paid over staged payments which you would use if you could not complete.

Why is it a risk

No Bank in Spain can offer a guaranteed loan that will last until the property is built. Unless the property is only a few months way from completion so 3 or 4 months this means you will have parted with staged payments with no guarantee that when you need it a loan will be forthcoming.

During the build phase things can and do change so lenders may change their criteria, loan to value they can offer or in worst case scenario be able to lend at all as happened in the 2007/8 banking crisis.

Buying off plan should be approached with caution as the risk can be high if you need a mortgage in Spain and advice should be taken before making a commitment.

Read the full article:- Off plan purchases mortgage risk in Spain 

Surprisingly good Spanish loan data

May loans in Spain

Whilst down considerably to 2019 figures Mays mortgage in Spain data was not as bad as could have been expected.

Affect of lockdown 

Given the country was in the height of the lockdown during April when Mays registered completions would have taken place it is a little surprising the figures are not worse than Aprils.

Maybe the time between completion and registration is longer than one would expect and Junes figures will be down on May.

Postive net inflow for Spanish lenders

Numbers of new loans whilst reflecting lower activity remained at reasonable levels and given redemptions were again very low this month for the Spanish Lenders the net inflow to the mortgage books was in fact very positive.

Read the full article:- May 2020 Spanish loan figures

Covid 19 hits Spanish lending levels

Aprils loan levels Spain

Aprils Spanish lending levels were down again on March and it is anticipated a further fall will happen in May.

Spanish Banks net inflows

For Spanish Banks whilst new loans are well down some 18% the number of redemptions has halved from normal levels so there was a net inflow onto the mortgage books.

During lockdown little happened by way of completions and land registry will also have been shut so there will be a delay in processing completions.

New enquiries increase

New enquiries are bouyant but this is just people preparing themselves for a possible purchase later in year. Few new applications were submitted in April and May.

Interest rates

Interest rates held steady and for second month in a row fixed rate product types outstripped variable rates. This is a massive change from the situation 5 years ago when fixed rates made up less than 5% of all new Mortgages in Spain.

Read the full article :- Covid 19 impacts on 2020 Spanish loan levels

February loan levels in Spain

Registered Mortgages in Spain

February figures published by the INE showed a marked increase in loan levels in Spain from February 2019 but a drop against Januarys figures.

This will not as yet be reflecting the situation with COVID 19 but March figures most certainly will.

Average loan size increases

Due to a significant rise in the average loan size which seems to relate to something that happened in Cataluna the amount of capital lent was however above January figures.

The rise in average loan size was very significant so will be an anomaly, what caused this is not explained in the report.

Small increases in interest rates

Interest rates edged up marginally and the level of fixed rates versus variable rate product types remains static.

Andalucia and Cataluna had the best months of all the regions.

Read the full article :- Spanish loan levels up on last year

Non euro earners and Spanish loans

New mortgage regulation in Spain affects non resident borrowers

Since the new regulation was introduced in Spain for lending more and more Banks have removed themselves from offering their full portfolio of offerings to those not earning their income in Euros.

This is due to the requirement under legislation to allow someone to request if FX rates drop by more than 20% that their loan is moved to the currency of their earnings.

Spanish Banks cannot offer all currencies

Many lenders are not in a position to move Spanish non resident loans to certain currencies and do not have the systems or the inclination to deal with more volatile and less traded currencies such as the Dirham.

All lenders in general have removed the access to fixed rates for non euro earners as the currency for the loan has to be bought in for the long term and the cost of any move would be sizeable.

Use a loan broker to find a solution

Whilst it is now more difficult to find providers from non euro earnings at IMS we are still able to place applications and can achieve variable rates for most nationalities.

Read the full article :- Certain non EU earners struggle to get a loan in Spain

Re-mortgages in Spain

Spanish Bank to do re-mortgages in Spain

After many years of all Spanish Banks dismissing the re-mortgage market one major lender has decided to put some focus on this area.

In a year when Covid 19 has disrupted completions and property purchases and after a fraught 2019 when new regulation delayed many Spanish Mortgages they are looking to add new business.

No fixed rate option

Only a variable rate is available but there is no Bank arrangement fee applicable and they will consider allowing any subrogation costs to be added to the loan.

Loan to value cannot exceed 60% and at initial purchase the owner must have put in a minimum of 30% themselves.

No life cover required

A big attraction could be that they will not require life is contracted and many previous loans had this product as compulsory and this has added to the monthly cost even if it was not required.

Read the full article :- Major Spanish Lender puts focus on Re-mortgages.

January loan figures before COVID19 in Spain

Beginning of 2020 looked positive

January Spanish loan figures looked to be a positive start for the year.

In most areas lending was up in terms of numbers of and capital lent despite the fact the average loan size fell quite heavily.

there were nearly 10 thousand more new loans added the Spanish Banks loan book than redeemed in the month and after many months of delayed completions due to new regulation things looked to be getting back to normal.

Interest rates stable

Interest rates were stable very close to Decembers rates and slightly down on last year. Variable rates were still the choice of most borrowers with fixed rates stabilising in last few months at around 42% of all new transactions.

Madrid after a very positive 2019 had smaller levels but other areas saw significant growth.

Impact of Covid19 on the Spanish lending market

COVID 19 and the shut down of Spain will cognate all this as completions started to dry up back end of February and new applications are more or less zero.

What impact for the full year this will all finally have is unknown at present but for sure 2020 will now be an even more challenging one than 2019.

Read the full article: - Spanish loans the calm before the COVID19 storm

December 2019 Spanish mortgages

December and year to date figures

December completions for Mortgages in Spain rose over November and against December of last year were significantly increased.

This is partly due to the backlog of applications after new Spanish regulation came out earlier in the year has started to get to completion.

Interest rates remain low

Interest rates remain low with variable rates down year on year and fixed rates only marginally increased.

Access to fixed rates for non euro earnings applicants continues to decrease.

Self build enquiries increase

A significant upturn is being experienced in enquiries for self build/ construction loans with lenders in Spain being a little more flexible on access to this type of mortgage product.

Read the full article:-Spanish home loans 2019 year to date

Spanish Bank Q4 Survey

Bank of Spain

The Bank of Spain who supervises Bank lending published the Q4 2019 survey of lenders in Spain.

The survey showed the Spanish Banks stating there had been a drop in demand of borrowers going through the application process and that credit had tightened slightly for household borrowings.

Spanish Mortgages downturn

The Banks put the downturn on demand of Spanish Mortgages to uncertainty across economic factors rather than new regulatory requirements.

Interest rates remain competitive

Interest rates remain low and in negative territory for the 12 month Euribor whilst access to fixed rates for the full term for non Euro earners continues too narrow.

UK borrowers will now struggle to get a fixed rate at 70% loan to value although a couple of lenders do remain in general they will only offer variable rate options.

2020 looks to be a challenging year

2020 looks to be a static year for Mortgages in Spain with Spanish Banks reporting they see no upturn in demand and the largest fall off of enquiries since 2013.

Read the full article:-Bank lending in Spain

Lending October improves over September

Spanish Mortgage levels improve in October

Loan levels in October were up on September by nearly a third but against October of 2018 remained behind.

Completions affected by new regulation implemented in June 2019 are starting to come through to completion but it has taken a long time to see things getting back to normality.

Decrease in  number of active loan brokers

Many Independent brokers have been unable to meet the new regulation requirements for the cut off of December 16th 2019 and the Bank of Spain has been struggling to provide information and a quality service for registration. Application process for brokers has changed significantly in last three months with more requirements now than outlined initially.

Home loans start to recover

Home loans made up a much higher percentage of all new credit in month than for last two months and interest rates remain overall down against last year.

Interest rates remain below 2018

12 month Euribor has edged up marginally last 3 months but remains in minus territory

Read the full article:- Lending in Spain improves in October