Mortgage agreements soar in Malaga despite the Euribor rate hike

Between January and July, some 22 per cent more mortgage loans were signed in the province than in the same period last year. Experts say that is yet another indicator that confirms the strength of the Costa del Sol property market

NURIA TRIGUERO

Malaga

Friday, 30 September 2022, 11:24

Newly released figures show an increase of more than 20 per cent in mortgage loans signed in Malaga, between January and July, than for the same period last year. The marked increase comes despite the rise in the Euribor rate.

Data from Spain's National Statistics Institute (INE) updated on Thursday showed a growth in lending activity that has led to 13,616 mortgage agreements being signed in the province between January and July, the highest figure recorded in this period of the year since 2010.

This strong increase in demand for mortgages in the province contrasts with the moderate growth at the national level.

During July the year-on-year increase in mortgage activity across Spain was 2.3 per cent, while in the province it reached 19.2 per cent. And the cumulative growth for the first seven months of the year was around 15 per cent at the national level, while in Malaga it was 22 per cent. Experts say that is yet another indicator that confirms the strength of the Costa del Sol property market.

Faced with the rise in interest rates, families are continuing to take refuge in fixed rates, despite the fact that the banks are already prioritising the marketing of variable rates. In July, the last month with published data, fixed-rate mortgages once again set a new all-time high: 75.4 per cent of the loans signed in that month were linked to an unchanging interest rate. Until a few years ago, fixed-rate loans barely accounted for 10 per cent of the mortgage portfolio.

The average amount of mortgages continues to grow in line with the rise in house prices. Loans signed between January and July this year in the province of Malaga had an average amount of 176,000 euros, compared to 159,000 euros in the same month of 2021 and 144,000 euros in 2020.

Euro Interbank Offered Rate

The Euribor, short for the Euro Interbank Offered Rate, is a daily reference rate, published by the European Money Markets Institute, based on the averaged interest rates at which Eurozone banks offer to lend unsecured funds to other banks in the euro wholesale money market.

The Euribor has almost doubled in September and will make the newest mortgages more expensive by 2,800 euros.

The index will close the month at 2.2 per cent after exceeding 2.6 per cent in its daily rate. Analysts are forecasting that the rate will exceed three per cent by the end of the year.

The 12-month Euribor, a reference for variable-rate mortgages in Spain, rose to 2.625 per cent on Tuesday 27 September – its highest level since January 2009.

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