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

2017 Mortgage news in Spain

Overview of activity

Activity across all areas of mortgage lending in Spain have increased during 2017. Growth has not been consistent during the year with a few blips along the way but in general average loan sizes are up, capital lent looks to have recovered and numbers of new loans will also have increase from 2016.

All Spanish lenders put in place at the beginning of the year very challenging targets and whilst these will not have been met never the less business levels have moved forward well during the last 12 months.

Buyers increase

Investors keen to make the most of low pieces per square meter have flocked to the major buying areas and Spanish nationals off the back of slow but sustained economic recovery are making high ticket purchases again like the buying of or upgrading of their home.

Interest rates have continued to fall during the year and fixed rates as a percentage of all new lending has continued to rise.

Fixed rate activity grows

Fixed rate interest levels fixed for the full term have encouraged people to consider this product type despite traditionally most mortgagees electing for variable rate products.

Best buys have fallen during the year with even non resident mortgage applications achieving rates from 2.1% for 10 years.

Underwriting

Risk assessment remains diligent but there is now some flexibility and underwriters come under pressure from retail sales to take a slightly more pragmatic approach to new files.

Whilst criterias must be adhered to more complex applications are now being underwritten which has not been the case for many years.

It is hoped that 2018 will continue the upward trend and that we will see more months in 2018 where new lending business outstrips cancellations and the Spanish Banks lending books start to grow again.

Read the full article:- 2017 review of Spanish loan market

Recovery for loans in Spain

September Mortgages in Spain

After a rather volatile month August Mortgages in Spain showed good growth again in September.

Average loan sizes grew considerably both month on month and year on year. The level of capital lent increased again month on month and year on year and for the first time in many years there was significant mortgage book growth for the Spanish Banks within the month.

over 8,000 new loans were constituted than loans redeemed.

Rates rise slightly

Interest rates spiked slightly increasing as an average for both variable rate products and fixed rates. This may move down again in the coming months as at least one major lender decreased fixed rates in November.

Overall the average interest rate was 2.83%.

Home loans

The amount of new mortgage applications being granted for the purchase of a home moved up from August levels where it dropped to below 60%. The percentage of loans given for buying a home went back up to normal levels of circa 63%.

Catalanu after a poor performance in August saw mortgage activity increase again but remains behind in increases to the other key regions of Madrid, Andalusia and Valencia.

The Canary Islands due to lower levels of new Spanish loans in the early months of the year is one of a handful of regions who is down annually. The Balearics on the other hand as a percentage are the highest in terms of annual increases but against limited numbers.

Read the full article:- Residential loan activity in Spain

Mortgage levels down in Cataluna

Impact of Cataluna Independence

Whilst pre the referendum held in Cataluna August Spanish mortgage data showed the region falling behind the upturn seen in other regions of Spain.

Mortgages in Spain rose month on month above July figures except for Cataluna who saw a fall.

Whilst the region remains up year on year and August 2017 figures were still above those of august 2016 there was a marked difference in the performance when compared to the rest of Spain.

Interest rates fall

Interest rates as an average continued to fall for both variable rate products and fixed rates. Fixed rates are down significantly on last year and the percentage of Spanish loan applications opting for a fixed rate has increased by over 50% in the last 12 months.

The data includes changes to existing contracts and the Spanish Banks have been moving clients with floor rates to fixed rates so this has also had an impact.

Numbers of new loans

Numbers of new loans increased both year on year and month on month but the average loan size whilst above last years dropped against July to the point where slightly less capital was lent in the month.

Whilst not yet a trend August saw another month where outflows were exceeded by new business added which is good news for the Spanish Banks.

Read the full article:- Lending up nationally Cataluna sees a drop

American loan applicants in Spain

American buyers

American buyers in Spain can expect favourable terms and conditions from Spanish Banks in comparison to other non EU citizens.

This is because the processes for documenting taxed incomes, recording of debt performance in the US is very clear and transparent and robust.

Other countries where this is not the case struggle to obtain the same terms and conditions offered to those residing in Europe.

Product availability

Maximum loan to value in Spain will be 70%. This is restricted because the property is a second home rather than primary residence.

If the applicant intends to live and pay income taxes in Spain after a sustained and prolonged period of time in the Spanish system a further 10% may be able to be borrowed.

Product types are not sophisticated as they are in America and no interest only is granted.

Loans are repayment either variable trackers of fixed rates foxed for the full term.

Application process

It is possible before coming to Spain to view property to get in place a fiscal approval. This requires a fully documented application is made to the lender and is underwritten by the risk teams subject to valuation of a property.

The securitization process in Spain is very different to the US as are the legal obligations and there is a lack of flexibility after completion in terms of changing product or lender so it is always best to take independent and expert advice from a mortgage broker before committing yourself.

Read the full article :- Mortgages in Spain for Americans

Spanish Banks improved lending levels

July data for mortgage lending in Spain

July figures over the month of June showed a decrease as was the same month over month for 2016.

Despite this the lending levels increased significantly against the same month of the previous year.

Activity on completions for Mortgages in Spain which was non existent in the month August historically in recent years has been much better due to legal firms not shutting the doors in the month.

This means that buyers are not rushing to complete before July ends and has given a smoother completion cycle across the year.

Spanish Banks

Spanish lenders are keen to do business at present and are some way behind their target levels fro the year.

Mid season sales offering reduced rates for completions before the end of September this year have been on of the rather bizarre ways the Banks have been fighting back.

Interest rates continue to fall with average rates reducing each month for both fixed rates and variable rate product types.

Fixed rates

Fixed rates after dropping off as a percentage of all completions rose agin to over 38% of all new loans in July. From the less than 5% of all new loans a couple of years ago the rise of the fixed rates has been quite spectacular.

What impact offering full term and long term fixed rates will have on margins in the future we do not know but for borrowers they are undoubtably a good deal.

This may continue for a few months as rates stay stable and Banks look to see off their competition.

After a couple of months of the Spanish Banks adding more new loans than those redeemed in July there was a net outflow.

Read the full article :- Spanish mortgage activity for the month of July

High net worth lending in Spain

New mortgage product for Spain

In an effort to fill a gap in the Spanish lending market a well known Swiss Private Bank has just launched a new product.

The loan allows for both purchases and re-financing.

No cash out is possible as any funds released from an existing property must be placed on deposit with the lender.

The lender offers a wide range of investment facilities set up to meet the needs of Private Banking clients.

Fixed rates and interest only

5 to 10 years fixed rates are available which can be taken interest only but with a minimum capital repayment of 5% per year.

For equity release the maximum initial term for the Mortgage in Spain , which can be re-negotiated is 5 years.

Borrowing up to 100% of the price or value of the property is possible by using a mixture of security of the Spanish property and against cash deposits.

Private banking requirements 

To access the product the applicant must become a Private Banking client and minimum deposit for this to happen is € 2.5m either on deposit or in managed funds.

The product will be ideal for the financially complex clients who do not want to buy a property in Spain with cash but find it hard to meet the normal documentation requirements of borrowing with the Spanish Banks.

Only ownership entities which are outside of Spain are applicable to lending so no-one who is ate payer in Spain or owns the property via a Spanish based company would qualify.

Read the full article:- Private Banking Lending facilities