Following the tightening of the European Central Bank (ECB) with its monetary policy, the mortgage market has undergone a real revolution. The ECB has increased the price of money, setting it at 3% in February 2023, with the aim of curbing the rise in inflation in order to guarantee price stability. This is undoubtedly having a strong impact on the mortgage market.
The market data show a boom in mortgage contracts. Fixed-rate mortgages were the most in demand, but mixed mortgages are proving to be the big winners. “The financial sector has focused its commercial efforts on bringing to market mixed mortgages with very competitive conditions – today they can be found below 2% in the fixed part – which are having a lot of acceptance among consumers seeking to ensure the quota against rate hikes, but do not want to assume a fixed rate for the life of the loan at 4%”, as published recently by Idealista.
The General Council of Notaries does not quantify what type of mortgages are contracted and the INE, according to its methodology, counts them as a variable rate (hence the boom in this type of mortgage in recent months).
Juan Villén, general manager of mortgages at Idealista, says “our operations follow a similar trend with respect to the total for Spain and what we are seeing is spectacular growth”.
In December alone, mixed mortgages accounted for 31% of the transactions brokered by Idealista, compared to 10% of variable-rate mortgages.
“This represents an increase in the number of transactions of 150% over the total number of transactions in 2021 and an increase of 400% year-on-year; that is, with respect to December 2021. Based on the mortgages signed through our mortgage broker service at idealista, mixed mortgages would account for 3 out of every 4 mortgages that the INE statistics classify as variable,” according to Villén.