There were 20,187 new residential mortgage loans signed in August, up 12% on last year, according to the Association of Spanish Notaries. The average mortgage value was just under €133,000.
Mortgage lending fell at the start of the pandemic in the first quarter of 2020. It bounced back strongly in the same period this year. Lending is still strong which goes to explain why the Spanish property market is looking so healthy. Whilst many thought the banks would cut lending they have not done so.
The number of loans signed in August were up 12% on last year. The average value of €132,940, however was down 1.6%, according to the Association of Spanish Notaries.
Mortgages by region
The most popular regions for mortgage lending were Andalucia, Catalonia and Madrid.
The islands and Valencia region saw the greatest percentage increase year on year, with 50% in the Balearics and 35% in the Canaries. However, Madrid saw a drop in lending, according to the year-on-year figures.
As the figures show, the areas most popular with foreign buyers continue to grow.
Euribor Interest Rate
The 12-month Euribor (the base rate used to calculate interest payments on most mortgages in Spain) ended the quarter at -0.492 as a monthly average compared to -0.414 the same month a year before.
What this means is that borrowers in Spain with annually resetting Spanish mortgages based on Euribor will have benefitted. For example, a typical €120,000 loan with a 20-year term would have seen their monthly repayments fall by around €4 per month.
Euribor is still near the all-time low it reached in January. However, inflation is on the rise in the Eurozone and the European Central Bank may have to raise rates as a result. Inflation in Spain is already at 4% and rising. In comparison, Eurozone inflation was 3.4% in September.