The rise in the Euribor due to the rise in interest rates has led to a moderation in the rate of credit. However, and in view of the fear that the outstanding mortgage balance will fall more than desired, Spanish banks maintain intense competition among themselves in order to attract new operations. Proof of this is that the average rate of new loans to purchase a home was below the closing of the Euribor in April.
This was recognized by the CEO of Banco Sabadell, César González-Bueno, during his speech at the summer courses organized by the Menéndez Pelayo International University and the APIE in Santander. The banker insisted that there is very clear competition in the Spanish financial sector, especially in mortgages.
In this sense, the average rate of new mortgages stood at 3.68% in April, according to data from the Spanish Mortgage Association (AHE) and 3.61% according to data published by the Bank of Spain. . In any case, these prices are decisive for the lower closing data of the Euribor for that same month, when the reference index for most variable-rate mortgages ended at 3.757%. And this despite the fact that these prices have been transferring the rise in interest rates to prices.
Precisely, this intense competition that financial institutions maintain among themselves makes some banks market credits to purchase housing at a fixed rate with an interest far from the indicator. Thus, while the Euribor moves around 4%, some commercial offers are placed below 3% TIN (excluding expenses and commissions). This is the case of Openbank mortgages, with an interest rate of 2.86% or BBVA, with 2.90%. Coinc or Cajamar are already in 3%.
Regarding variable rate loans, the rise in the Euribor has caused the reverse path and there has been a cut in the differential applied to the reference index, until it was below 0.50%, as is the commercial offer of Evo Banco (with a differential of 0.48%) and Kutxabank (0.49%). In fact, the digital bank has exceeded 3,100 million euros in credit investment at the end of May, which represents a growth of 42% compared to 2,178 million euros just twelve months ago.
Precisely the strong activity of Evo Banco in mortgages has led Bankinter together with Caixabank to be the only two banks that have seen new mortgage production improve in year-on-year terms, according to the data corresponding to the first three months of the year and which were given to know during the presentation of results.
fall in mortgage credit
In April, the last figure published, the volume of new credit to purchase a home stood at 3,913 million euros, according to data from the Bank of Spain, which represents a decrease of 1,000 million euros compared to March. A year ago, the total volume of new mortgages amounted to 5,626 million euros. Despite these data, it is also true that the data for April, with the permission of March, is somewhat better than in January and February.
Regarding the outstanding mortgage balance, it continued to fall during this start of the year, according to the data published by the body chaired by Pablo Hernández de Cos. This has caused the total volume of loans to purchase a home to close at 504,355 million euros, which represents a drop of 10,000 million in just twelve months, although in percentage terms, the decrease has been only 2 % This is due to the fact that with the rise in the index, households have opted for early repayment of their loans. All in all, it would be the lowest level since October 2020, in the midst of a pandemic.
In addition to containing the drop in the volume of credit, it must not be forgotten that this strategy allows banks to win clients in the future, since these credits imply linking the client, with payroll and insurance, for a long period of time, and opens the door to continue contracting more products with your reference entity.