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Home mortgage firms are up 11% in 2022 but down 9% in December

Overall, 2022 was a good year for the mortgage market. This is certified by the data of the latest report of the National Institute of Statistics (INE): in the past year, more than 463,614 mortgages on homes were registered in the Property Registry (10.9% more than in 2021), which is the highest figure since 2010. However, all that glitters is not gold, because the statistics of the INE also indicate that the contracting of these products fell in the last quarter; especially in December.

Do you want to know why the market is trending downwards? In this article we will review all the data from the INE report and try to explain the reasons behind the bad data of December. In addition, here you can see how many mortgage loans were contracted at a fixed and variable rate at the end of the year and how many contracts were modified.

Fewer mortgage loans enrolled during the last quarter

Data is like cotton: it does not deceive. During the month of December 2022, according to the INE, 30,075 mortgages on homes were registered, which represents a decrease of 22.5% compared to November and 8.8% compared to December 2021. It was also the third consecutive month in which registered loans of this type decreased, so the downward trend is more than clear.

But why did such a good year end this drop in enrollments? Surely, it is due to a good number of reasons, but from HelpMyCash we believe that these are the main ones:

  • Interest rates rose in 2022, especially in the second half of the year, due to the European Central Bank’s rate hikes and the rising price of the Euribor. As mortgage was more expensive in the last months of the year, there were fewer people who could afford to take out a loan to buy a home; Hence, the number of signatures decreased.
  • Economic uncertainty grew due to inflation and the war in Ukraine. Over the months, the economic situation of many families worsened, which also explains, in part, that fewer people wanted to mortgage at the end of 2022.

Looking ahead to the coming months, this downward trend is likely to continue for the same reasons we have pointed out, given that mortgage interest rates are still rising and economic uncertainty has not dissipated.

Fixed mortgages hold the rate

Another interesting statistic provided by the INE is what interest rate the mortgages registered in 2022 had; both throughout the year and in December. In the whole of the year, fixed mortgages were the queens of the market: they represented 70.9% of the total loans on housing registered in the Property Registry, the highest percentage in the history of Spain for this modality.

Of course, during the second semester, although more fixed mortgages were still registered than variable, the percentage was decreasing. In December, this modality represented 65.5% of the total, while the variable rate represented 34.5%. It must be said, however, that in November there were fewer fixed-rate mortgage loans (65.4%).

Fewer modifications of housing loans?

To finish this annual balance of the mortgage market, we will see how many mortgage loans on homes were modified throughout 2022:

  • A total of 124,042 novations were carried out (agreements between bank and client to change conditions); 45.6% less than in 2021.
  • There were a total of 21,304 creditor subrogations (mortgages transferred from one bank to another); 36.3% less than in 2021.
  • A total of 6,189 debtor subrogations (mortgages assumed by other persons) were made; 41.9% less than in 2021.

In total, the volume of modified housing loans fell by 44.3% compared to the previous year. Now, it’s fair to point out that mortgage changes doubled in 2021, so it makes sense that these operations moderated in 2022.

In 2022, 394,013 mortgages on homes were cancelled; 5.80% more than in the previous year. Probably, this increase is due to the liquidation of loans signed during the bubble, that more people were able to use their savings to pay off their debt early, that a good number of mortgaged decided to return all the money before the interest was raised and that not a few clients refinanced their mortgage by hiring a new one and canceling theirs.

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