A summary of the Spanish mortgage market data released in the last quarter of 2019 – interest rates, mortgage costs, and mortgage market lending volumes in Spain.
Euribor Spanish mortgage interest rates in Q4 2019
12-month Euribor, the base rate used to calculate interest payments on most mortgages in Spain, came in at -0.261 as a monthly average in December compared to -0.129 the same a year before, meaning it was more than twice as low over 12 months (chart above).
As a result, borrowers in Spain with annually resetting Spanish mortgages based on Euribor would have seen their repayments fall by around €7 per month for a typical €120,000 loan with a 20 year term.
Euribor slipped into negative territory back in February 2016 because of the ECB’s policy of quantitative easing to keep the Eurozone economy afloat. Rates appear to have turned a corner, and started to creep up towards positive territory, but it could take years to get there. The cost of borrowing to finance a home purchase in Spain will remain low for the foreseeable future.
Spanish mortgage lending volumes
The number of new residential mortgages signed was up 8.1% in October to 24,296 new loans, according to figures from Spain’s Association of Notaries. That’s the third consecutive month of increase, and suggests the Spanish mortgage market is back on its growth path after the turbulence caused back in June and July 2019 by the introduction of a disruptive new mortgage law intended to protect borrowers that made it harder to get a mortgage.
The average new mortgage loan value for buying a home was €132,489 in October, down 3.9% in a year.
The lower growth and increased volatility in mortgage lending we saw in 2019 reflects a slowdown in home sales in the same period, suggesting the Spanish property market is losing momentum in the face of increasing headwinds. This will put buyers with good credit profiles in a stronger position to negotiate deals in 2020.