The Housing boom mortgages 11 years high: 385,000 loans have already been granted by November 2021
The housing fever has already spread to the mortgage market. More flats are sold than in 2008, and as most are financed with credit, mortgages go up like foam.
Between January and November 2021, 384,596 mortgages were signed, according to data published today by the INE.
This is 23,305 more loans than before the pandemic (in 2019), and five hundred more than in 2010, shortly after the housing bubble burst.
"The mortgage evolution is very positive, although since September we detected a moderation in the figures, this new momentum indicates that we will close 2021 with more than 400,000 operations, despite the stop of the pandemic," predicts María Matos, Director of Studies, and spokesperson for Fotocasa.
Housing boom mortgages 11 years high
In 2019, however, it must be borne in mind that the mortgage law was approved, which slowed down credit applications for several months due to the uncertainty of the new regulations.
The signing of mortgages, therefore, already exceeds the levels of 2010. But it is still far from the more than half a million mortgage loans granted in 2009.
In November alone, 36,220 loans were granted, the highest figure this month also since 2010, when more than 43,000 mortgages were signed.
According to statistics, the average amount of mortgages on homes increased by 1.5% in November, to 138,189 euros, while the borrowed capital grew by 26%, to 5,005 million euros.
The confinement aroused a renewed need to change houses to a more spacious one. In addition, after the shutdown, demand has more accumulated savings than ever.
This, added to an environment of interest rates at historic lows, have been fuelling the sale of homes and the granting of mortgages.
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"This rate of loan concessions is in line with the sales made in recent months. These are data that reflect that the impact of the pandemic has boosted home buying like never before,” adds Matos.
In fact, three out of four buyers financed the purchase operation through a mortgage. Specifically, in 2021, 74% of those who want to acquire a home apply for a credit, according to data from Fotocasa.
In the penultimate month of last year, the average interest rate for total mortgage loans stood at 2.59%, with an average term of 24 years. In the case of housing, the average interest was 2.53%, up from 2.42% a year earlier, with an average term of 25 years.
” We are facing a battle waged by financial institutions, in which they try to compete with the level of Euribor, lowering prices to stimulate sales, " Matos says.
32.5% of mortgages on homes were constituted last November at variable rate, while 67.5% were signed at fixed rate. The initial average interest rate was 2.17% for variable-rate mortgages and 2.74% for fixed-rate mortgages.
The bubble cautions the housing boom mortgages 11 years high
In the last bubble, banks were on the hunt for customers by offering loans that covered 100% of the price of housing and more and lowering the requirements to obtain financing to the minimum expression.
In 2021 the mortgage war has returned, but it is waged on other fronts. Now, banks compete via interest rates and, in the background, raising the funding threshold, but only to profiles that ensure solvency.
The younger ones are another new niche that banks are betting on. Santander, MyInvestor or Ibercaja are already launched for young people with mortgages of up to 95%.
"In fact, throughout 2021, we have seen several entities with the largest price declines in memory. The current good interest reduction conditions are causing many small savers to start buying housing, " adds Matos.
