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34% Increase in Mortgage Approvals in May

26,579 home mortgages approved in May

26,579 home mortgages approved in May

The number of mortgages granted for home purchases in May was 26,579, an increase of 34.1% over the same month in 2015. The average amount mortgaged was 126,394 euros, which is actually 2.6% lower than in the previous year, according to data released by the National Statistics Institute (INE).

The total value of mortgages constituted on urban property amounted to 4,465.8 million euros, 22.2% more than in May 2015. For home purchases, the total capital borrowed was 2,777 million euros, an annual increase of 33.1%.

Mortgages for homes accounted for 58.4% of the total capital borrowed in May, a 12.6% increase over the previous month. Regarding the amount of capital loaned, the monthly increase is 8.6%.

Interest Rates

Of the new mortgages granted in May, 80.4% were on a variable rate, compared to 19.6% on a fixed rate. In 93.8% of new contracts the Euribor was the reference rate applied.

The average interest rate at the beginning of the term was 3.21%, while the average term was 22 years.

For residential property, the average starting interest rate was 3.19%, which is 6.1% lower than in May of the previous year.

By Community

The top three autonomous communities, by the number of mortgages granted on homes in May, were Andalusia (4,916), Catalonia (4,495) and Madrid (4,366).

However, none of those three communities feature in the top three for the annual rate of change. The winners there are the Balearic Islands with 66.9% more mortgages granted than in the same month in the previous year. Second was the Basque Country with an increase of 51.6%, and Castilla-La Mancha with an increase of 47.7%.

The communities with the most capital loaned for residential property are Madrid which approved mortgages to the value of 620.8 million euros in May. Catalonia follows with 505.1 million euros, and Andalusia with 466 million euros.

When looking at the monthly variation in the number of mortgages granted we find Navarra at the top with 36.5% more mortgages issued in May than in April 2016. The Canary Islands approved 31.1% more in May than in April, while in the same period Castilla y León saw a 24% increase in mortgage approvals.

All communities recorded a positive monthly variation except for three. They are Extremadura (-9.3%), Castilla-La Mancha (-7.3%) and Asturias (-5.4%).