The AHE points to an increase in fixed mortgages as opposed to mixed mortgages

This change is due to more favourable interest rate expectations and their reflection in bank offers. The take-up of fixed-rate mortgages has ‘become more vigorous’ in the first quarter, while mixed-rate loans have shown a slight slowdown after the ‘significant advance’ recorded in 2023, according to the Quarterly Statistical Bulletin of the Spanish Mortgage Association (AHE). The evolution of new fixed-rate mortgages ‘has not been entirely linear’ in the first part of the year, driven by more favourable interest rate expectations and the adaptation of bank offers to these expectations. This context has led to a ‘certain recomposition’ in new contracts, with initial fixed-rate loans over 10 years representing 55% of new mortgages, compared to 43% in the last months of 2023. On the other hand, mixed loans, with an initial fixed rate between one and 10 years, have decreased from 41% to the current 33%. However, the AHE stresses that this segment ‘continues to have’ a greater presence than before the ECB’s monetary policy change, when they accounted for around 15% of new mortgages. Variable loans, with a fixed rate applicable only during the first year, continue the downward trend of the last decade, intensified in the last two years, representing less than 12% of new contracts. ‘The data reveal a growing presence of more conservative consumers in the market, who prefer more secure financial planning to avoid interest rate fluctuations,’ explains the AHE. Since 2022, the contracting of loans with an initial fixed rate of more than one year has increased by almost 15 percentage points, reaching almost 90% of new mortgages. Since 2015, this increase has been 50 percentage points. The AHE report confirms the trend indicated by idealista/hipotecas, which highlights not only a greater weight of the fixed rate, but also a reduction in changes of mortgages to improve the initial conditions. According to data from idealista’s mortgage broker, in May only 5.8% of the mortgages brokered were used to improve conditions, through subrogations or cancellations and new mortgage openings. This is the lowest figure since March 2022, far from the peak of 20% reached in the second half of last year. In addition to formalisations, there is also a slowdown in the demand for mortgage changes to improve conditions, standing at 7% in May, compared with 20-21% between July and October 2023, when the ECB announced its latest interest rate hikes. This is the lowest level since early 2023. This change is due to the stability of the Euribor, the change in monetary policy and the first interest rate cut in the euro area in eight years, announced by the ECB in July.