Mortgage activity in residential real estate showed a notable uptick in September 2019, rising about 4% from the same month a year earlier. The total number of new housing loans reached 53,000, marking the strongest September for residential financing since 2010, according to the National Institute of Statistics (INE) data released this week. This reflects a steady year-over-year expansion in home loan activity before the 2021 comparison period began.
Looking at the year-over-year change in September, the growth remained positive yet softened to a level six points lower than the August pace. The residential mortgage sector has now posted 19 straight months of annual increases, underscoring a sustained interest in home ownership even as market conditions shift.
The average amount borrowed to purchase residences declined modestly, slipping by 1.4% versus the previous year. In September, the average loan amount reached 143,222 euros, while the total loaned capital rose to 6,318.8 million euros, reflecting a combination of more loans at smaller sizes and continued demand for financing as property prices evolve.
Regarding pricing and terms, the overall average interest rate on housing loans stood at 2.59%, with an average loan term of 23 years across all housing loans. For residences specifically, the average rate settled at 2.47%, slightly below the 2.48% recorded in the prior year, and the average maturity extended to 24 years, indicating lenders continued to favor longer financing horizons for buyers.
In September, 31.8% of residential mortgages were arranged at variable rates, while 68.2% were fixed-rate agreements. This mix represents the lowest share of variable-rate loans since December 2021, suggesting a renewed preference for rate stability among borrowers. The initial average rate on variable-rate residential loans was 1.96%, compared with 2.70% on fixed-rate loans, reflecting the typical difference between adjustable and fixed terms during this period. The data illustrate how borrowers balanced short-term rate exposure with longer-term payment certainty as market dynamics evolved. (Citation: INE)