2018 mortgage performance to date

October loan figures.

October loan levels in Spain showed a small decrease over September of 2018 but good increases when compared to the same month of the previous year.

Mortgages in Spain grew yearly by 20.4%

Interest rates

Interest rates remain low although we may see some upward movement when December data is published due to the Spanish Banks raising rates after being forced to pick up mortgage deed tax costs.

Bespoke mortgage applications

New mortgage regulation will be issued in 2019 and some lenders in anticipation of the canes are starting to drop charging any fees related to the loan set up for premium clients.

Linked to this are compulsory products and very tight debt to income ratios along with ,minimum net earning requirements but more and more lenders in Spain are looking to tailor product terms to the fiscal quality and risk profile of the applicant.

Net loan inflows in October

More new home loans completed in the month of October than were redeemed giving a second month of net inflows.

Read the full article :- Mortgage performance for October

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