The mixed rate mortgage has become the queen of mortgage market to the detriment of the fixed mortgage and also surpassing the variable. This is shown by the data collected by the mortgage comparator iSavings in his latest analysis of the Spanish mortgage market during the first quarter of 2023. This trend, which was already beginning to be glimpsed at the end of 2022, has been consolidated especially during the months of February and March of this year.
“The mixed mortgage rose from its ashes during the second half of 2022, although a few months before many users were already beginning to be interested in this product, in terms of firms we began to notice a real change in trend in November of last year” , explains Marcel Beyer, the CEO of iAhorro. Specifically, According to the iAhorro Index published this Thursday, in January 2023, 40.30% of the mortgage loans signed by users who went to the mortgage comparator were governed by a mixed interest ratea figure that in February shot up to 64.22% and in March moderated a bit, standing at 53.92%.
Likewise, the iAhorro Index has become the first source that collects data on mixed mortgages signed in Spain since no official body, not even the National Institute of Statistics (INE) registers them as such, but instead considers them fixed since The first period of this type of loan is governed by a fixed interest rate. Thus, according to the INE, in January 2023 (the last month for which the official body publishes figures), 67.40% of the mortgage loans signed in Spain were governed by a fixed interest rate and the remaining 32.60% by variable one.
There is an increasing supply and demand for mixed-rate mortgages
Among the reasons for the rise in demand for mixed mortgages are: that more and more banks are betting on including this product in their offer, the increase in the interest rates of fixed mortgages and the security they provide, during their fixed period , is greater than that provided by variable mortgages.
So much so that Laboral Kutxa, TargoBank and CaixaBank have joined Openbank and ING, Banco Santander, Bankinter, Ibercaja, EVO and Hipotecas.com and are already offering mixed mortgages to their customers as well. “Those who were not marketing mixed mortgages are beginning to do so to be competitive in the market,” says Beyer, who adds that “in iAhorro, in March of this year, we have signed mixed mortgages with a fixed initial period of 1, 50% TIN”, well below what we can now find in fixed or what the variable remains when adding the Euribor to the differential, which we remember that also in March stood at 3.647%.
And, although iAhorro, until now, did not collect data on the types of mixed mortgages because they represented a very low percentage of the firms that registered, with the increase in supply and demand they have included the data for the first quarter of 2023: in January the average mixed rates signed by users of the mortgage comparator stood at 1.97% in the fixed tranche, which typically covers the first five to ten years of the mortgage loan; in February that TIN rose a little, to 2.17% and in March it stood at 2.25%. Despite this, it is still almost half a point below that registered in 100% fixed mortgages.
The fixed-rate mortgage is already at 3% TIN… or above
So far in 2023, fixed-rate mortgages have become more expensive compared to the offers that were available last year. However, as the CEO of iAhorro states, “now we are beginning to see more stability. The banks continue to adjust their offers, but they do so little by little and not as abruptly as during 2022”.
Thus, between January and March 2023, the average at which users who went to iAhorro signed their fixed mortgages was 2.65%, a figure 0.6 percentage points higher than that registered from October to December 2023. 2022 (2.05%). Regarding the monthly average, we see that in January it stood at 2.43%, in February it rose to 2.76% and in March it stabilized at 2.74%. If we compare these data with that registered in January 2023 by the INE, we see that the average recorded that month by the official body is even higher: 2.79%.
“At iAhorro we get better interest rates for our users’ mortgages than those offered by banks to customers who go to them directly,” says the general director of the mortgage comparator. Despite this, contrary to what has happened with the mixed mortgage, the fixed mortgage has been losing followers in recent months: from having more than 80% of the market share in the third quarter of 2022, they have become present in only 30.39% of the mortgages signed by the comparator in March 2023, according to data from the iAhorro Index.
What happened to the variable mortgage?
Despite the fact that the Euribor has continued to grow, although it is true that not as drastically as it did in 2022, the mortgages that they have with a variable interest rate (differential + Euribor) have remained in terms of market share refers and they continue to account for between 10 and 15% of the loans signed by iAhorro users: in January 2023 they represented 10.45% of the signatures, in February 13.64% and in March that percentage rose a little , up to 15.69%.
What will happen from now? The CEO of iAhorro assures that “everything will depend on the policy followed by the European Central Bank (BCE), of whether or not official interest rates continue to rise”, now located at 3.5% after the two increases carried out in February and March, of +0.5% each, which also causes a rise in the prices of Mortgages, whether fixed, variable or mixed.
