Signs of life in the mortgage market

It looks like Spanish banks are getting more interested in mortgage lending – a prerequisite for any housing market recovery.

Something is stirring in the Spanish mortgage market, reports the Spanish daily El Mundo. After all but turning off the mortgage taps last year, in the last few weeks several lenders have started offering more attractive terms, in a sign they might be getting ready to lend again.

New mortgage lending collapsed from 1.34 million approvals in 2006 to 274,000 in 2012, according to data from the National Institute of Statistics. When the figures are released, 2013 will be even lower, and could well turn out to be the bottom of the market.

But now that banks are returning to the market, it is possible to find mortgages with a spread below 2pc (the difference between the base rate and the bank rate), and fixed rates below 4pc. This time last year spreads of 4pc were common.

Bankinter lead the way in September with a variable rate of Euribor +1.95pc, followed by Cajasur offering Euribor +1.25pc. In January the biggest Spanish bank of all – Santander – joined in with a rate of Euribor +1.99pc.

A greater appetite for mortgage lending amongst banks is a prerequisite for any recovery in the housing market. However, all the new mortgages come with strings attached and are only available to the most solvent clients.


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