Mortgage-lending rose significantly in September, says INE

A total of 29,388 mortgage contracts were signed between October 2016 and September 2017, according to the National Institute of Statistics (INE).

The average home loan was €123,649, typically covering part of the purchase price and the taxes and fees involved, usually around 12.5%.

Most banks offer a maximum loan-to-value ratio of 80% for a first residence and 60% for a second or subsequent property.

The amount borrowed by the average homebuyer rose by 9.6% on September 2016, and by 10.9% on August 2017, whilst the total sum lent for property purchases across the country was up nearly 20% year-on-year and 22.6% on August, reaching an aggregate of nearly €3.7 billion.

For this September, the typical interest on a new mortgage was 2.67%, showing a decrease of 13.5% on the same month last year thanks to the ever-decreasing Euribor, or Eurozone interest rate, which has been making home loans more and more affordable in the last five years or so.

For this reason, and the fact that the Euribor is not expected to increase in the near future and certainly not significantly in the long term, nearly two-thirds – 65.8% - of mortgages signed up in Spain in the 12 months up to and including September this year were variable rate, as opposed to the remaining 34.2% which were fixed-rate loans.

The average mortgage term applied for was 23 years, although banks are still offering loans of 35, 40 and even 50 years in some cases to help younger buyers get a foothold on the housing ladder.

More mortgages were signed for in Madrid – 5,660 – and Andalucía (5,542) than anywhere else in the country and, despite the disputed independence referendum looming fast, Catalunya saw the third-highest number of contracts sealed, at 4,989.

The greatest increases were reported in Aragón, with new mortgages up by 20.2%; Valencia, by 19.8% and Castilla-La Mancha, by 18.6%.

In terms of sums lent, the total handed over to property-buyers was highest in Madrid at €970.7 million, followed by Catalunya at €704.4m and Andalucía at €618.2m.

Increases in total sums loaned in September, compared with August, were also highest in Madrid and Catalunya at 26.6% and 25.1% respectively, and in Valencia at 22.8%.

Some regions saw a decrease in total sums borrowed by buyers between August and September, most notably Navarra (25.1% less), La Rioja (21.1% less), and Extremadura (9.3% less).