Implicit Interest Rate on Mortgage Loans Falls to 0.820% In May

According to data from the National Statistics Institute- INE, the implicit interest rate on all mortgage contracts stood at 0.820% in May (0.826% in the previous month).

The interest rate rose from 0.655% in April to 0.677% in May for contracts signed in the last three months. In May, the average principal debt rose by 96 euros to 56,011 euros. The monthly instalment rose by one euro, to 232 euros.

According to the INE, the implicit interest rate on mortgages fell to 0.820%, down 0.6 basis points on the previous month. In contracts entered into in the last three months, the interest rate was 0.677% (0.655% during the last period).

For housing purchases, the most relevant in the set of mortgage loans, the implicit interest rate for the total of the contracts decreased to 0.838% (-0.6 b.p. in comparison to April). In contracts signed in the last three months, the interest rate increased for the first time since August 2020, settling at 0.671% (0.652% in the previous month).

The average monthly payment, considering all the contracts, rose by 1 euro to 232 euros. Of this amount, 38 euros (16%) correspond to interest payments and 194 euros (84%) to principal. In contracts signed in the last three months, the average monthly instalment rose by four euros, to 280 euros.

In May, the average outstanding principal for all contracts rose by 96 euros compared to the previous month, to stand at 56 011 euros. For contracts entered into in the last three months, the average amount of capital outstanding was 114 355 euros, 397 euros less than in April.