Mortgage loan subrogations continue to rise due to rising interest rates

Mortgage subrogations, or what is the same thing, a change of financial entity to improve credit conditions, continue to grow, and already account for 15.2% of mortgage deals signed in June, which is 6% more than a year ago, according to data from the Idealista nekretnine portal.

The average amount of the requested loan for the implementation of subrogation was 161,985 euros in the second quarter, 1.5% less compared to the same period in 2022. The sum represents an average financing of 56% of the purchase price of homes.

The vast majority of requests are related to loans of less than 200,000 euros (76.9% of the total number), of which the part between 100,000 and 200,000 euros is the most common (52%), according to the real estate report, which outlines a rather specific profile of candidates, which is repeated in more than half of the operations. These are households whose monthly income does not exceed 4,000 euros – 46% are between 2,000 and 4,000 euros per month. Same data, transferred to Galician communityplace the average amount of subrogated mortgages at 121,508, which represents 53% of the purchase price. The profile of the average applicant corresponds to the profile of a family with a monthly income of 3,152 euros.

The mixed type prevails

The preferred option for subrogations is mixed rate mortgages, which continue to gain traction in the market. According to Idealist, that’s 61.6% of all deals signed in the second quarter, compared to 50% from January to March. This formula allows you to pay fixed interest during the first years of the loan and variable interest during the rest of the repayment period.

Fixed rate mortgages continue to lose ground in the Spanish market as a result of the rise in Euribor, and make up 28.8% of the changes formalized in the spring, compared to 31% in the first quarter, which is the lowest figure in the last three years.