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Slowly, but surely: variable mortgages continue to gain ground on fixed mortgages.

The National Institute of Statistics (INE) has published today its Mortgage Statistics, which collects the main data on mortgage loans registered in the Property Registry during the month of November 2022. And one of them is especially striking: the percentage of variable mortgages registered on homes with respect to the total rose to 34.6%, while that of fixed mortgages fell to 65.4%.

When you see this statistic, you will surely think that it is not so much, because fixed-rate mortgages are still the queens of the mambo of the mortgage market. However, if you compare this report with that of previous months, you will see that there is a clear trend: slowly, but surely, variable interest begins to gain ground to fixed. In this article we will demonstrate it to you and we will also explain why this phenomenon occurs.

Why does the percentage of variable-rate mortgages rise?

Between the months of January and November 2022 (the last month with data from the INE), the vast majority of registered mortgages had a fixed interest rate. In fact, until September, the hegemony of this modality was total: less than 30% of housing loans registered in the Property Registry had a variable rate.

It is easy to guess why the Spaniards mostly opted for a fixed interest. On the one hand, the rise of the Euribor in 2022 led many people to opt for this modality, which is not affected by the ups and downs of this index (the variables do depend on it). And on the other, the still attractive prices of many fixed mortgages, especially during the first half of last year, encouraged their hiring.

During the summer of 2022, however, the variable rate began to gain ground on the fixed rate. You can see it in the following table:

Period Fixed Variable
January 2022 70,4% 29,6%
February 2022 73,8% 26,2%
March 2022 72,7% 27,3%
April 2022 75,3% 24,7%
May 2022 72,8% 27,2%
June 2022 73,0% 27,0%
July 2022 75,4% 24,6%
August 2022 71,9% 28,1%
September 2022 68,2% 31,8%
October 2022 66,8% 33,2%
November 2022 65,4% 34,6%

Source: National Institute of Statistics

As you can see, the percentage of mortgages for variable-rate housing began to rise in August, exceeded 30% in September and remained on the rise in October and November. This is a clear change in trend that will probably increase in the next INE reports.

And why did the percentage of registered variable mortgages rise? Mainly, because banks raised their fixed rates throughout last yearEspecially from July, when the first interest increase of the European Central Bank took place. As fixed mortgages were already less competitive, there were more people who preferred to link to the Euribor, although their value was trading upwards.

The hiring of mortgages, increasingly stagnant

Another trend confirmed by the INE Mortgage Statistics is that the contracting of mortgage loans began to stagnate in the last four months of the year. According to this agency, a total of 2022,39 housing loans were registered in November 304. It is 9.3% more than in the same period of 2021, but 4.2% less than the previous month. And with this, there are already two months in which the registration is going down.

It should be remembered, in this regard, that the National Institute of Statistics publishes mortgages registered in the Property Registry. After contracting and deeding, these loans are not registered until after one or two months, so the housing loans registered in November were signed, most likely, in October, September or even August.

The data of the General Council of Notaries do show us the mortgages for housing that were deeded (contracted) in November 2022. According to this agency, in that period 28,391 loans of this class were deeded; 8.5% less than in the same period of the previous year. The conclusion, as you can see, seems clear: the hiring of mortgages begins to stagnate.

La Rioja and Castilla – La Mancha, polar opposites

You have to know, however, that this stagnation does not affect all Spanish autonomous communities equally. In some, the number of mortgages registered on homes rose considerably during the month of November 2022, while in others it fell by more than 10% year-on-year.

La Rioja was the community in which the registration of these products grew the most: 41.3% compared to November 2021. Castilla – La Mancha, on the other hand, was the other side of the coin, since there the registration of mortgages on homes fell by 10.1% year-on-year.

As always, the communities in which more housing loans were registered were Andalusia, Catalonia, the Community of Madrid and the Valencian Community. In Andalusia, 8,271 loans of this type were registered (+8.3% year-on-year), 6,947 in Catalonia (+12.8% year-on-year), 6,640 in the Community of Madrid (+16.2% year-on-year) and 4,558 in the Valencian Community (+9.8% year-on-year).

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