Fixed mortgages are living one of their best moments. In recent months its use has become so widespread that it has become a real alternative to the euribor, the benchmark indicator of the mortgage market in Spain. And that is now more attractive than ever: in August has marked its twelfth consecutive minimum.
Following the strong take-off of the fixed rate during 2016 and early 2017, the most recent statistics reflect a stabilization that puts their weight close to 40% of new housing loans that are formalized. However, the fixed rate is not set at the same pace throughout the territory: as with demand or price stabilization, we find great differences between the autonomies.
According to data collected by the Association of Property land Registry , in the second quarter of the year, 38.51% of new home mortgage loans in Spain were linked to a fixed rate, while 60.15% eurib. The remaining 1.34% was linked to other interest rates, such as the IRPH tax return in Spain.
Within this national average we find two extremes: in one of them are the Mediterranean autonomies, the islands and some areas of the north, which become the regions where the fixed rate is most devastating.
In the ranking we find up to seven communities where the weight of fixed mortgages exceeds 40% with Asturias at the top: it is the only region where the fixed rate surpasses its variable rival, reaching 53.27%. The second on the list is Catalonia, with 49.05%; followed by Baleares (46,05%), Comunidad Valenciana (46,01%), Murcia (45,2%), Galicia (42,06%) and Canary Islands (41,41%).
At the other end of the table are the Basque Country (25.41%), Extremadura (25.46%), Navarre (26.88%), Aragon (27.3%) and Madrid %), who occupy the last five places in the ranking with less than three fixed mortgages for every 10 formalized between April and June. Above 30%, but below the average, we find Castilla-La Mancha (30.78%), Castilla y León (31.5%), La Rioja (31.99%), Cantabria %) and Andalusia (37.89%).
And what is the reason for these differences? According to expert Juan Villen, “the areas where there is a greater purchase by foreigners usually have more fixed-rate mortgages, being a product that they know well: they are widely used in their countries of origin. Likewise, the second residences are usually financed more with fixed rates, because they are taken as an investment and it is preferred to avoid scares “. In addition, adds Villén, “the average amount is lower, so the difference with the share of a variable rate mortgage is not so relevant.”
In addition to foreigners and second homes, another factor to take into account is the greater or lesser commitment by fixed rates by the strongest banks in each region. For example, CaixaBank, BBVA and Sabadell, very strong entities in Catalonia, are promoting fixed rates.
And what about Madrid, the Basque Country and Navarre? For Villen, part of the answer is found in that they are three of the autonomies with the highest purchasing power of Spain. “In these regions, where mortgages and purchasing power tend to be higher, buyers are more inclined to variables for short-term savings and their ability to absorb future increases in quotas when the Euribor leaves its historical lows” , insists.
At the moment, the euríbor is still installed in negative territory, although next year we could see already a change of trend. The financial sector itself is convinced that next spring this indicator will pick up the bullish trend, which means that mortgages at variable rates will once again become more expensive.
In this sense, experts remember that the euryb will sooner or later return to historically normal levels (the average around 2.3%), not forgetting that before the crisis never managed to move below 2%. So, given that the market assumes that the monthly installments of variable rate mortgages will again become expensive, many homebuyers are betting on the great advantage of the fixed mortgage: the peace of mind that the same amount of money, from the first month of life of the loan until the last.