Average mortgage volumes continue their 10% rise

The number of mortgages approved, and the average loan value, was around 10% higher in 2017 than in the preceding year.

The latest Spanish mortgage data from Spain’s National Institute of Statistics (INE) for November 2017 has revealed that the average loan capital for that month was €122,703, which represents a 10.7% increase on the same month in 2016.

This rise is significant because it has continued the trend of roughly 10% growth in the average mortgage, marking the third month in a row that, year-over-year, banks increase their lending by that amount…

The growth does not quite reflect average price increases; mortgage amounts are rising faster than property values, but this trend shows that banks are regaining confidence in not only the Spanish property market but also the average homebuyers’ ability to repay higher monthly terms.

According to the INE data, 36.5% of the mortgages granted in November last year were on fixed rate repayment terms, which is a relatively high percentage.

Taking into account all mortgages granted in Spain in 2017 up to November 30, the INE data shows a total of 290,000, which is a 10.4% increase on 2016. This 290,000 figure is less than the reported 400,000 home sales in Spain last year (up to December 31), which indicates that around one-quarter of all transactions in Spain are cash sales that do not require a mortgage.

There were 24,882 mortgages issued in November last year, which is curiously slightly lower than in the same month in 2016. However, in August last year mortgage activity hit a seven-year-high.