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Eurozone mortgages rose to the highest since 2016 before the ECB rate hike

MADRID, 2 Ago.

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Eurozone mortgages rose to the highest since 2016 before the ECB rate hike


The interest applied to new loans to individuals for the purchase of housing in the eurozone, according to the composite indicator of the European Central Bank (ECB), reached 1.94% in June, which represents a monthly increase of 16 basic points compared to of 1.78% in May and the highest cost since June 2016.

The composite indicator, which combines the different interest rates of all loans to households for house purchase, increased in June driven by the effect of the interest rate, according to the institution.

In this way, the interest of 1.94% corresponding to the month of June represents an increase of 64 basis points compared to the historical minimum of 1.30% observed in September 2021, although it remains far from the maximum of 5.55% registered in September 2008.

The highest level of compound interest for new loans for house purchase in June was observed in Greece (3.07%), ahead of Ireland (2.81%) and Germany (2.57%). On their side, the lowest interest rates were observed in France (1.35%), Portugal (1.46%) and Finland (1.59%). In the case of Spain, it rose to 1.69% from 1.63%.

Among different loans, the interest rate on loans for house purchase with a variable rate and with an initial rate fixation period of up to one year increased by 14 basis points to 1.66%.

In turn, the rate on housing loans with an initial rate fixation period of more than one and up to five years increased by 16 basis points to 2.03%, while with an initial rate fixation period of over five and up to ten years increased 21 basis points, to 2.23%.

For housing loans with an initial rate fixation period of more than ten years, the rate rose 12 basis points to 1.86%.

At the end of last July, the Governing Council of the ECB decided to raise interest rates by 50 basis points, so that the interest rate for its financing operations has come to 0.50%, while the deposit rate will reach 0% and the loan facility rate, 0.75%.

In this way, the ECB undertook an increase in the price of money greater than it had anticipated in recent weeks, when several members of the Executive Committee indicated that the rise would be 25 basis points.

On the other hand, the price of housing in the euro zone registered an annual increase of 9.8% in the first quarter of 2022, which represents the highest increase in house prices since Eurostat began collecting data in 2005.

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