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New mortgages has experienced an upward trend

Resorting to financing for the purchase of a house is nothing new. However, in recent months the signing of new mortgages has experienced an upward trend. In May, they increased 7.3% year-on-year, reaching 31,166 contracts for new mortgage loans, according to the INE.

Increase and current situation

Increase and current situation

It cannot be ignored, that of these 31,166 new mortgage contracts, 40.6% are of a fixed rate, which means a large increase in fixed mortgages and places them at a historical maximum.

The average amount of a mortgage has also increased by 2.8% compared to the data for May of last year, remaining at an average amount of 117,044 at the end of May 2018.

In total, the capital lent during May 2018 was 3,647.8 million: 16.7% more than the end of the previous year, 10.3% more than a year earlier and an increase of 3% compared to April.

Interest rate: fixed mortgages increase

Interest rate: fixed mortgages increase

As for the interest rate applied on the mortgages constituted on the total of the farms in May; The initial average rate was 2.63% (4.3% less than in May 2017) and the average term of 22 years. In this case, 61.9% were mortgages that were closed at variable interest and 38.1% at a fixed rate.

Regarding the mortgages applied to housing, the average interest rate was 2.62% (9.2% lower than in May 2017) and with an average term of 23 years. However, how fixed mortgages increase is the most striking fact; 40.6% of variable mortgages were contracted, representing an increase of 6.3% over the previous year.

Segmenting by Autonomous Community, we see that the ones that contracted the most mortgages on housing were Andalusia (5,752), Madrid (5,193) and Catalonia (4,895) and those with the highest annual variation rates were Canary Islands (70.9%), Castilla-La Mancha (21.7%) and Extremadura (18.5%).

Moreover, the places where more capital was granted; Madrid (877.1 million euros), Catalonia (692.8 million) and Andalusia (584.4 million).

It’s a good moment?

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The data speak for themselves, and many consider whether it is a good time to apply for a mortgage, since, this growth of the mortgage loan firm (and especially fixed mortgages are the ones that increase ) seems to set a pace at normalized rise, oblivious to seasonal factors.

We also have to take into account how fixed mortgages increase; Either because people are increasingly looking for economic stability, knowing how much to pay each month or because banks are offering better and better conditions for this type of mortgage contract.

Therefore, if you are thinking of hiring a mortgage to buy your home , this may be a good time. Always analyzing your personal and economic situation before and being sure that you can assume the fees and costs that are generated.

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