New mortgages close March with their worst quarter in three years

May 7. (EUROPE PRESS) –

The mortgage market closed its worst quarter in March since the third quarter of 2020 in terms of mortgage signature volume, according to data published by the Bank of Spain this week and consulted by Europa Press.

Specifically, the new loans for home purchase granted during the first quarter were 13,438 million euros, which represents a decrease of 15% compared to the volume granted a year ago.

The generation of mortgages could not offset the repayments, which reached 19,197 million euros, so the outstanding balance at the end of March was 505,193 million euros. This translates into a net decrease in the Spanish mortgage portfolio of 5,759 million euros compared to 510,957 million in December.

The outstanding balance of Spanish mortgages has been contracting for eight months, reaching its worst level since February 2021 in March. In addition, the portfolio is still far from the more than 650,000 million that it reached in 2010, within the framework of the crisis finance and the housing bubble of those years.

March closed with new mortgages worth 5,340 million, which represents an improvement of 33.7% compared to the previous month (1,344 million more in absolute terms). Compared to March 2022, the decrease was 17.8%.

By maturity period in March, the bulk of the operations (46.3%) were signed with a maturity period of more than 10 years, equivalent to 2,474 million euros, while the mortgages granted with maturities between 1 and 10 years stood at 1,494 million euros, 28% of the total. 25.7% of the mortgages granted were made for a term of less than one year, standing at 1,373 million.

Regarding the price, the weighted average interest rate without counting related expenses (TEDR) of the new operations was 3.54% in its weighted average, being the highest rates for the shortest periods, while for terms of more than 10 years stood at 3.12%, 15 basis points more than in January. In March 2022, mortgages of more than 10 years were signed at an average rate of 1.39%.

This increase represents a bulging increase in the price of mortgages. With an effective fixed rate of 1.39%, a 30-year mortgage of 150,000 euros and without making early repayments represents a disbursement of 33,528 euros in interest. With a rate of 3.54%, the interest payment shoots up to 81,177 euros.

Regarding the weighted average rate of outstanding balances, it stood at 2.70%, 18 basis points more than in February. Compared to a year ago, the average rate has risen by 1.58 points.