During the second semester of 2015, 22% of the total mortgages contracted with Kutxabank were at a fixed rate
In 2015, Kutxabank allocated more than 600 million euros to mortgage loans in Euskadi, 28% more than the previous year, and achieved a penetration of close to 35%. During the second semester of 2015, 22% of the total of mortgages contracted with Kutxabank were at a fixed rate, and the profile of the buyer is that of couples under 35 years old, with savings of 50,000 euros requesting 115,000 euros to emancipate themselves.
These data are included in the annual report on the mortgage market prepared by Kutxabank, which last year formalized one-third of all the mortgages subscribed, in collaboration with Servatas, the main Basque appraisal company.
Among its conclusions, the study shows that in 2015 the number of people who were inclined towards a fixed rate loan at the time of financing the purchase of a house in Euskadi was gradually increasing. In fact, during the second semester of the year, 22% of the total of mortgages contracted with Kutxabank were this type of loans, which maintain a fixed and constant quota throughout their amortization period.
On the other hand, although Kutxabank had in 2015 a range of mortgage products of reference in the market, both fixed rate and variable rate, the preferred mortgage option for the Basque market at the time of requesting financing for the acquisition of a floor continues being the traditional one of variable type referenced to the Euribor, modality of loan that was the chosen one in 85% of the contracts formalized during all the exercise.
As a benchmark, in other territories in which Kutxabank has an “intense” mortgage activity, the percentage of fixed-rate loans reached 26% in 2015 in the case of its expansion offices and rose to 40% in Catalonia.
Profile of the Basque buyer
Practically four out of ten mortgage loans subscribed in Euskadi by the Financial Group in 2015 corresponded to young people under 35 years of age. The strong activity of this group maintains the characteristics of the average profile of the people who decided to finance their home.
The profile corresponds to that of a young couple, under 35 years old, with savings or family benefits of 50,000 euros, and to which the entity granted 115,000 euros to finance less than 75% of the appraised value of a second-hand home.
The analysis of the mortgage loans granted by Kutxabank reveals that, by province, the highest average loan corresponded to Gipuzkoa, where the standard mortgage reached 133,000 euros, compared to 127,000 in Bizkaia. On the opposite side was Álava, with an average loan of 114,000 euros.
Most of the flats acquired by Kutxabank customers are located in the three Basque capitals. By province, in Álava, 85% of the total of the homes sold corresponded to buildings in Vitoria. This percentage drops in the case of Bilbao and San Sebastián, with 32% and 35% of the total, respectively.
Barakaldo, with 11%, and Getxo, with 5%, complete the list of municipalities with the highest activity in Bizkaia, while the localities with the highest purchase-sale rate in Gipuzkoa are Irun (7%) and Errenteria (6%).
As for the percentage financed, 63% of Kutxabank’s clients do not exceed 75% of the appraised value, and the average repayment period is 26 years, as in 2014.
More VPO than in 2014
The strength of the sale of second-hand free homes is another feature that remains unchanged. The average age of the acquired apartments exceeds 35 years, in the case of Gipuzkoa and Álava, and reaches 39 years in the case of Bizkaia.
In the appraisal data elaborated by Servatas it is gathered that the model of the house that is usually acquired in Euskadi is that of a flat with a total area of 78 square meters, 2.6 bedrooms, ms and a single bathroom.
It also highlights the growth in the number of Officially Protected Homes financed by Kutxabank, since the loans granted for the purchase of subsidized housing in the three territories were doubled.
Of the total operations subscribed in Álava, 23% went to VPO, while this percentage was 13% in Bizkaia and 12% in Gipuzkoa.
The report reveals that Kutxabank allocated more than 600 million euros to the financing of real estate in Euskadi in 2015 alone, with a total of 4,700 approved operations, most of them for the acquisition of housing, and 85% of the cases for first homes.
These data confirm “a clear change in the cycle” of the housing market in the Basque Country, with a “significant reactivation of solvent demand”, since the increase in the number of loans granted was 28% and 16%. % in the number of mortgages contracted.
It was in Bizkaia that a higher number of loans were contracted, although the largest percentage increase corresponded to Gipuzkoa. As for all the Kutxabank networks, the number of mortgages contracted increased 40% and 26% the number of loans.
More mortgage offer in 2016
With “rigorous and stable” criteria in its credit granting policy, the banking group maintained its leadership in the Basque mortgage market last year, with a stable penetration rate of around 35%.
Kutxabank has started 2016 by marketing a new ‘mixed mortgage’, which adds to two of the reference loans of the market, the fixed rate and the variable rate. In this way, it has completed a range characterized by “broad flexibility” in terms of amortization and interest rates, which allows customers to obtain “interesting bonuses” in final prices.
One of the main advantages of the mixed mortgage is that it allows to contract a repayment period of up to 30 years and combine different terms between the fixed and variable rates, with tranches in the fixed rate from 5 to 20 years. It also offers the possibility of obtaining significant discounts on final prices, thanks to a wide range of insurance and forecast products, which the customer can combine and exchange to their liking to obtain and maintain bonuses throughout the life of the loan.
In the case of young people under 35 years of age who are planning to purchase a home, the new mixed mortgage maintains the advantageous financing conditions, as well as the reduction of certain bonding requirements. In fact, Kutxabank assigns to its younger customers an automatic deduction of 0.25% in interest rates, regardless of the products they keep contracted with Kutxabank.