The contracting of the variable rate reaches thirteen-month highs due to the rise in the mixed mortgage
He mortgage market shows resistance in the midst of the summer break. The slowdown in sales registered in August, which puts an end to thirteen consecutive months of increases, and which real estate portals attributed to high prices, contrasts with the mortgage firm, which maintains its momentum with a rise of 7.5% year-on-year. The improvement in financing conditions in the heat of the cuts undertaken by the European Central Bank (ECB), on the one hand, and the need for the banking sector to grant more mortgages to compensate for the drop in margins with greater Volume, on the other hand, drives the granting of credit for housing.
The statistics corresponding to the eighth month of the year – the last available – show that the interest at which these loans have been financed has fallen to the levels of February 2023, up to 2.89%, with a difference of just one tenth between the average of those financed at a fixed rate (2.85%) and the variables (2.95%).
One of the most striking data is the jump experienced by those referenced to the Euribor. If in July 29.9% took advantage of this modality, a few weeks later the figure has skyrocketed and represents 40.6% of the total. An opposite path to that followed by fixed rate loans, which have fallen from a market share of 70.1% to 59.4%.
The increase places the proportion of variables at its highest level in the last year, since to find a similar threshold we must go back to July 2024, shortly after the organization headed by Christine Lagarde has just started the cycle of cuts in the price of money. With the reference currently above 2% and waiting for confirmation that the downward path has come to an end – the market anticipates at most an additional drop – fixed interest has lost steam. Industry experts attribute this behavior to boom who live mortgages mixed and that the National Institute of Statistics (INE) includes them within the variables, hence the double-digit increase recorded by this category.
The CEO of RN Your Mortgage Solution, Ricardo Guliasexplains to ‘La Información Económica’ that this behavior is due to the predisposition of the entities to promote this product to “attractive” interests, which They range between 1.2% and 1.5%. Mixed mortgages are so called because they combine an initial period in which the same installment is paid and after that time the interest rate is referenced to the Euribor. Furthermore, the early repayment fee is lower, which is an incentive when opting for this option.
“Some of the best offers for high profiles include mixed interest rates of 1.2% for five years and 0.35% for a variable rate. More than interesting prices,” they point out. from the Kelisto.com price comparator alluding to the strong competition that exists in mixed right now. However, they also warn that August is usually a complicated month when it comes to drawing conclusions due to the lower activity due to the summer holidays, so some operations may appear “overrepresented for no apparent reason” and distort statistics. “There are arguments to think that the variables have gained weight after months of reducing rates and curbs on fixed rates, although we will have to wait for the next few months to see if the trend is consolidated,” they indicate.
We must not forget that the payment of the same interest throughout the life of the credit had a symbolic figure until not long ago. It was in the era of ‘ultra-low’ rates when this product turned the mortgage market upside down, reaching its peak in July 2022when it accounted for 75% of new hires and pushed the variable to the background, marking a historical minimum. Since then, this proportion has been fluctuating, but with a predominance of fixed ones. In recent years, there has only There was a time when the variables They aimed to give the surprise. It happened in April 2024, when more than 47% were contracted linked to the Euribor.
The CEO of Bankinter, Gloria Ortiz, took advantage of the presentation of results for the third quarter last week to address the “irrational” competition among banks, especially in fixed lines. “Banks are granting 30-year mortgages below the price of money,” he added. In this context, the sector is optimistic and confident that the appetite for credit to cover the purchase of a home will continue. The proximity of the end of the financial year may encourage some entities to launch “more attractive” campaigns to achieve objectives set for the year, which can lead to a general reduction in the cost of mortgages.
