Mortgage debt of households is growing for the first time in 2005 to 24.5%

Mortgage debt of the Spanish families came back to beat records in 2005, then rose to 474,400 million euros for the first time in its history and also recorded an annual growth of 24.5%, a figure that had not been made any year previously. According to provisional data from the Bank of Spain, credits for the purchase of a home rose last year by nearly 93,000 million, representing about 20,000 million more than in 2004.Con this increase, debt that dragged the Spaniards sprayed trademarks in the previous two years, who had successively been the highest since 1990, the year going back to statistics from the supervisor.

Faced with such rapid growth rates, the mortgage burden of households has doubled since 2001, primarily due to increased housing prices, forcing borrow more bulky to access a building.

According to the Ministry of Housing, the value of housing on the open market grew again last year, albeit at a rate of 12.8%, the lowest in the past four years. That factor has been decisive for the price of the mortgage average rose to 144,352 euros until November, according to the latest data published by the National Statistics Institute (INE), which revealed that a year before the amount was less than 18,800 euros.

The families have not only had to increase the amount of their mortgages but have also had to face a rise in the cost, given the evolution of the Euribor 12 months, the indicator most often used to set the interest rate on mortgages.

The Bank of Spain confirmed today that the index was in January at the highest point of the last three years, the 2833%, after climbing more than half a point in the last twelve months. This rise will mean in practice a new price hikes in the monthly fee of mortgages that have the half-yearly review in the coming weeks, so that holders of a loan of 120,000 euros to 20 years will have to pay 30.58 euros per month Ie 366.96 euros per year.

On the other hand, the rapid increase in loans for house purchases of homes and non-profit institutions contributed to the total credits of this sector in the last year exceeded the 650,000 million euros, representing a rise of 21 , 2% over the end of 2004.

Of that amount, 175,507 million related to debts incurred for purposes other than house purchases, although they had increased at a rate much lower than that of mortgage loans, 13.2%.

(Unrated)

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Written by Carlos Lopez on February 17, 2006 with 2 comments.