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

Mortgages in Spain stuck in pipeline

Loan levels down

After a good start to the year the last two months have seen significant dips in loan levels and capital lent for Mortgages in Spain.

The key reason appears to be the speed at which loans can now get to completion due to new regulatory requirements.

Pipeline log jam

There is a log jam with most Spanish lenders and the calling off period that must start again if an offer expires is causing delays.

The number of loans redeemed in the month was lower as well reflecting the fact this may be a pipeline issue rather than a drastic reduction in business.

Levels better than August

Septembers reported figures were up on August but some 31% behind the same month of last year.

Whilst the average loan size went up this was not enough to compensate for the lack of numbers so capital lent was down.

All regions of Spain saw a hit although Madrid had a much better month than others.

Middle East and UK applicants continue to see access to the full range of products decrease.

Read the full article :- Loan levels in Spain under pressure