Key Charts - Size and Structure
Spain Looks to Fix its Real Estate Lending
- Spanish banks are offering more fixed-rate mortgages, which represents a break from tradition in a country where virtually all outstanding mortgages have had variable rates.
- Fixed rates are a boon for risk-averse homebuyers afraid of their monthly payment ballooning unexpectedly, as occurred for many Spaniards between 2005 and 2008.
- Now that they can hedge the interest rate risk cheaply with ECBís quantitative easing lowering rate expectations, these new products also make sense for banks looking to compete in an intensifying lending environment.
Sources: Bloomberg, Milken Institute.