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

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