The number of mortgages originated on homes rose by 2.3% in July 2022 compared with July 2021, reaching 35,918 loans. This marked the highest July total since 2010, when more than 55,000 mortgages were signed, according to data released this week by the National Institute of Statistics (INE) of Spain. The July figure shows a record for the month over a 12-year period, yet the year over year growth rate has moderated in recent months. In fact, the July increase of 2.3% is almost ten points lower than June and represents the smallest year-over-year rise since February 2021.
With the July rebound, mortgage activity entered its 17th consecutive month of year-on-year gains. The average loan amount for home purchases rose by 8.1% in July 2022 versus July 2021, while the total borrowed capital climbed 10.6% to 5.26 billion euros. Regions that registered stronger activity in July included Catalonia with 7,102 new mortgages, Andalusia with 6,846, and Madrid with 5,558. Likewise, the largest concentrations of lending for residential mortgages were in Madrid at 1.224 billion euros, Catalonia at 1.187 billion, and Andalusia at 861.1 million. In eleven autonomous communities, mortgage activity increased in July 2022 relative to July 2021, while six regions showed declines: Madrid down 16.2%, the Canary Islands down 13%, La Rioja down 12.8%, Navarra down 6.6%, the Basque Country down 5.3%, and Extremadura down 5.2%. On the other hand, Catalonia posted a year-on-year gain of 21%, the Balearic Islands 19%, and Castilla-La Mancha 10.4%, with two-digit annual increases in several locations.
In the first seven months of the year, the number of mortgaged homes for purchase rose 14.8% and the borrowed capital grew 23.2%. A new maximum flat rate was observed in July, with monthly rates down 16% and borrowed capital down 16.6% from June. Still, the month recorded the largest drop in mortgage activity in July within the last five years. The average interest rate on all housing loans in July stood at 2.56% for a typical 24-year term, while loans for houses averaged 2.50%, slightly below the 2.53% seen a year earlier with an average maturity around 25 years.
Floating rate mortgages accounted for 24.6% of residential loans in July, while fixed rate loans represented 75.4% — the highest share on record. The initial average rate was 2.03% for floating-rate mortgages and 2.68% for fixed-rate loans.
Mortgage activity in rural and urban properties rose by 2% in July 2022 compared with July 2021, totaling 47,339 loans. In the seventh month, the capital lent through mortgages increased by 18.8% to exceed 7.628 billion euros, while the average mortgage amount across all properties rose by 16.5% to 161,136 euros.
The number of mortgages with changed terms in July 2022 reached 11,062, a figure 56.6% lower than in July 2021. Of these, 8,788 changes involved borrowers staying with the same financial institution, a year-over-year decrease of 59.2%. Transactions that changed the creditor were 1,835, down 38.5% from July 2021. In 439 cases the mortgaged asset changed ownership to a successor borrower, a 54.2% drop from the previous year. About a quarter of the term changes, 25.7%, were due to interest rate adjustments. Following the changes, fixed-rate housing loan rates rose from 22.3% to 49.9%, while floating-rate loans fell from 76.3% to 47.2%. The Euribor index remained the reference rate for the largest share of floating-rate mortgages both before and after the changes (69.6% and 43.4%, respectively).
After term adjustments, average rates on fixed-rate loans decreased by 0.9 percentage points, and floating-rate loans fell by about half a point. These movements reflect shifting borrowing costs as lenders recalibrate deals in a fluctuating rate environment.