Flats for sale and rent in Salamanca.
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The Castilians and Leonese have to dedicate 24.24 of their salary to pay the mortgage payment on the home
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Fixed-rate mortgages for home purchase already exceed 57% of new loans in Castilla y León, which coincides with the rise of the Euribor that this February is reaching values not seen for 20 months, which will cause the first increases in prices for those who have to review their credit now. Although it is still in negative territory, the majority of Castilians and Leonese opt for security, as opposed to the variable formula.
The preference for this type of fixed loans has spread throughout the country, as reflected in the data of the College of Property and Mercantile Registrars of Spain consulted by Ical. In fact, in 14 communities, including Castilla y León, more mortgage loans were formalized at a fixed rate than at a variable rate during 2021.
Likewise, the estimates of registrars indicate that throughout this year it is not foreseeable that this scenario will be modified, so they believe that throughout the coming quarters the contracting of new mortgage loans at a fixed interest rate will continue to mark new all-time highs across the country.
The higher amounts contracting at a fixed interest rate occurred in the Region of Murcia (74.78 percent), La Rioja (70.12 percent) and Aragon (66.18 percent), while the only ones that have formalized a greater number of variable-rate mortgage loans were Extremadura (54.97 percent), Comunidad de Madrid (53.04 percent) and País Vasco (52.59 percent).
What’s more, fixed loans went up 5.69 percent in 2021 in Castilla y León, above the 4.27 for the country as a whole, reaching 57.09 percent. On the opposite side, variable mortgages represented 42.91 percent, of which 42.34 percent are referenced to the Euriborwhich therefore continues to be the preferred indicator, far from the rest.
Financial instability, despite the fact that the European Central Bank (ECB) has not touched interest rates, has led to Euribor to rise, so that the provisional average for February marks minus 0.341 percent, compared to minus 0.501 percent in the same month a year ago. So for one average mortgage of 150,000 euros at a term of 25 years with a differential of one percent on the Euribor, the monthly installment will go from 531 euros to 542 euros, which represents an increase of 10.5 euros per month or 126 euros per year.
a quarter of the salary
All this forced the Castilians and Leonese to dedicate the 24.24 of the salary to pay the housing mortgage payment, a percentage that was reduced in 2021 by 1.68 percent. Overall, the loan installment stood at 440 euros per month in the Community, far behind the 595 euros for the country as a whole.
In eight autonomous communities there were interannual decreases in the mortgage payment monthly average, compared to promotions in nine. On the other hand, the percentage of said quota with respect to the salary cost showed reductions in practically all of the autonomous communities (16), giving rise to increases in only one.
The registrars advance that short term stability “We understand that it will continue to be the trend throughout 2022, to the extent that there are no forecasts of changes with significant effects on the fundamental variables (mortgage debt, interest rates, contract terms and salaries)”.
Finally, the number of housing certifications for foreclosure reached 97 in Castilla y León in the fourth quarter and the number of dations in payment, 21.
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