Mortgage trends and rate changes in October across regions

Mortgages issued for residences rose by 13.5 percent in October from the same month in 2021, totaling 41,022 credits. This marks the highest October figure since 2009, with more than 52,000 mortgages signed in the period according to data released on Thursday by the National Institute of Statistics INE.

October saw an year over year rise and a gain of nine points from September. Home loan chains extended across 20 consecutive monthly increases, reflecting sustained momentum in residential financing.

The average amount borrowed for residential mortgages climbed 8.4 percent versus the previous year. In October the average loan value reached 149,730 euros, while total borrowed capital grew by 23 percent to 6,142.2 million euros.

October set a record for the number of home mortgages in the regions of Andalusia, Madrid and Catalonia, with 8,116; 7,984; and 6,692 loans respectively.

Regions with the largest lending volumes for residential mortgage facilities were Madrid with 1,762.8 million euros, Catalonia with 1,121.2 million euros, and Andalusia with 1,010.4 million euros.

In thirteen communities, more home mortgages were signed in October than in the same month in 2021, ending a four year decline overall. Castilla-La Mancha showed a drop of 28.6 percent, Navarra down 5.7 percent, Murcia down 3.4 percent and Castilla y León down 1.6 percent.

Conversely, the Canary Islands posted a 46.3 percent increase, Aragon 38.3 percent, and the Basque Country 33.2 percent. Galicia and the Valencian Community recorded more modest gains of 0.7 percent and 1.6 percent respectively.

In the first ten months of the year, the number of mortgaged homes rose by 12.9 percent, while the borrowed capital increased by 20.2 percent.

Fixed rate mortgages, at least

On a monthly basis from September to October, home mortgages fell by 7 percent, and borrowed capital decreased by 2.8 percent. Even so, these declines are among the smallest observed for October since 2020.

During October the average interest rate for all housing loans stood at 2.66 percent over 23 years. For houses specifically, the average rate was 2.50 percent with an average term of 24 years, compared to 2.54 percent and a similar term a year earlier.

About one third of residential mortgages were issued at a variable rate in October, while 66.8 percent were signed at a fixed rate. This marked the lowest variable rate share since September 2021. The average initial rate was 2.03 percent for variable rate mortgages and 2.74 percent for fixed rate mortgages.

Mortgage farms increased by 10 percent

Data from the statistics institute show that mortgages on rustic and urban farms, including those on residences located on such farms, rose by 10.3 percent in October 2022 versus October 2021, reaching a total of 53,809 loans.

Capital lent for these mortgages increased by 23.3 percent in October, while the average amount per mortgage on residences rose by 11.8 percent to 163,485 euros.

Changes in conditions drop

Last October, a total of 10,198 mortgages had conditions changed, which is 50.9 percent lower than in October 2021. Of these, 8,401 were innovations involving the same financial institution, down 51.8 percent year over year.

There were 1,405 transactions involving a change of the creditor, 44.2 percent fewer than October 2021. Ownership changes of mortgaged assets in 392 cases, representing a 53 percent decline from the previous year.

Thirty-five point three percent of the 10,198 modified housing loans were due to changes in interest rates. After changes, the share of fixed rate mortgages rose from 24.2 percent to 53.3 percent, while variable rate loans fell from 75 percent to 44.9 percent.

The Euribor rate remained the reference for the largest share of variable rate mortgages both before and after the changes, with 69.3 percent and 42.2 percent respectively. Following the changes, the average interest on fixed rate loans dropped by one point, and variable rate mortgages fell by four tenths.