Average home mortgage in Spain climbs 17pc 02/08/2006 00:00

2 August 2006

MADRID – The average home mortgage in Spain has risen by 16.9 percent within the last year, according to the latest figures.

A typical home mortgage in May was EUR 140,189, 0.9 percent more than the previous month.

General mortgages had climbed by 12.9 percent since last May and 0.5 percent since April to EUR 154,213.

As Spaniards take out larger and larger mortgages, the proportion of their income which goes to paying mortgage repayments is at the highest level in the country’s history.

According to the Bank of Spain, in the second quarter of this year families spent 40.9 percent of their gross available salary on their home, two points more than in the previous three months of the year.

Back in 2004, they were only spending 35 percent of their income on their mortgages and even last year, they only spent 36.8 percent.

The bank predicts that mortgage debt will continue to grow despite the fact that rises in house prices have been slowing down in the last few months.

In May, a total of 173,397 new mortgages were taken out, 28.99 percent more than the previous month and 14.55 percent more than a year ago. Of those, 124,007 were home mortgages, 30 percent more than in April and 15 percent more than in May of last year.

More than half the mortgages were taken out with cajas de ahorros, saving banks, and a third were taken out with banks.

The average type of interest offered by the cajas was 3.62 percent over an average period of 26 years, while banks offered an average of 3.7 percent over 25 years.

The regions where the average mortgages were highest were Navarra (EUR 214,000) and Madrid (EUR 201,000).

Extremadura (EUR 109,000) and Asturias (EUR 122,000) had the lowest mortgages.

[Copyright EFE with Expatica]

Subject: Spanish news