28 May, 2023 @ 11:15
1 min read

New mortgages slump as real estate market continues to slow down in Spain

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Image by Oleksandr Pidvalnyi from Pixabay

THE NUMBER of new property mortgages fell by 15.7% in March compared to a year earlier according to figures from the National Statistics Institute(INE).

36,182 mortgages were handed out in what was the biggest fall since January 2021 which was at the height of the Covid-19 pandemic.

The news is another indicator of how the housing market has been slowing down since last autumn due to the economic crisis.

Euribor interest rates were in ‘minus’ territory in March 2022 but now stand at 3.75%, thereby impacting heavily on real estate deals and mortgages.

The higher rates not only affect repayments for existing mortgage holders but starting rates for a new buyer are averaging out at 2.99%- the highest figure since April 2017.

The days of fixed-rate mortgages below 2% have gone for the time being with deals starting at around 3.15% while variable rate mortgages are at 2.72%.

The INE says that fixed rate mortgages account for 63.9% of the market, which is the smallest percentage in nearly two years.

Capital loaned out by banks for home buyers dropped by 17% in March.

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