November leaves the cheapest fixed rate mortgages in history | Economy

The mortgage market remains sluggish. The intense reversal of the first wave of the coronavirus, with double-digit year-on-year declines in every month between March and July 2020, only left a reaction in September, when it rose 18%. Since then, the recovery has not continued and loans to buy houses have been in a kind of sluggishness. An example of this is November, when 28,756 home mortgages were constituted, which is 2.4% less than in the same month of 2019. This despite the data published this Wednesday by the National Institute of Statistics (INE) They also show that monetary policies to contain the coronavirus are having an effect on credit prices: fixed-rate mortgages signed in November were the cheapest in history.

Specifically, the INE statistics indicate that the average rate of loans with non-variable interest was 2.77%. Until now, the lowest mark was the 2.84% that they had marked in September, two months earlier, which means a notable jump. In the time before the pandemic, fixed interest was getting cheaper but at a very slow pace. It was precisely another month of November, that of 2019, which had the record for the cheapest loans with 2.99%, an outstanding brand because it managed to drop 3%, but which did not continue in the following months. Until the coronavirus: every month since March 2020, non-variable mortgages have fallen below that 3% barrier.

As a whole, counting all fixed and variable loans (which are slightly in the majority), November leaves an average interest rate of 2.45%. That means they are not the cheapest mortgages ever for very little. That honor still corresponds to September 2020, when the average interest was 2.44%. The reason is that variable mortgages, although cheaper than fixed ones, show the uncertainty of a pandemic that is lengthening and stood in the penultimate month of the year at 2.19%, that is, above the minimum mark September (2.12%) and also of what they marked in summer or in the first months of the health crisis. It should be noted that the statistics refer to the average interest rate that mortgages have for the purchase of a home in their first year: that is, phenomena such as variable loans are not collected, which normally start a few years at a fixed rate and then they go to the variable.

Step back

Back to the total volume of the market, the INE data show that the loans accumulated between January and November are 7% below the levels of 2019. It is a bad figure for a sector that grew before the pandemic, but not a debacle. It resists better, for example, than home sales, which are between 20% and 30% lower. This is associated with the fact that the pandemic has affected more purchases with an investment profile (more likely to be paid in cash) than those made out of necessity (that is, for a family that wants to have a house or change the one you have). If no major shocks occur in December, home mortgages would end 2020 at an intermediate level between what they marked in 2017 and what they marked in 2018. It is a step backwards, but relatively small compared to the blow that the crisis has dealt to others sectors.

In volume of capital borrowed, for example, the figures are practically the same as last year. In November, loans granted for the purchase of a home totaled 3,930 million euros, 3% more than in the same month of 2019. In the accumulated annual (that is, adding the first eleven months of 2020), this indicator is only one 0.2% below the previous year. The average amount of mortgages in November was 136,676 euros, 5.5% higher than twelve months earlier.

Finally, the figures are somewhat less promising when looking at the mortgage market as a whole and not just the housing market. Put another way: houses are holding up better than other real estate assets. In November, the total number of mortgaged properties (which adds rustic and all types of urban, including homes) was 38,974, 7% less than in the penultimate month of the previous year. The borrowed capital, 5,592 million, was 3% lower. In the accumulated of the first eleven months of 2020, the number of total loans resists even better than housing (-6.3%), but the capital volume is 5.5% below the 2019 levels. poor performance of rustic properties: with 18% less mortgages and 21% less borrowed capital.

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