Families Set Record for Non-Mortgage Debt Increase in June

Families raised their non-mortgage debt with banks like never before in June, with the biggest monthly rise in history. Household liabilities for consumer credit and other loans that do not correspond to home purchases rose by 11.240 million. The positive part is that there was a decrease in delinquency after several previous alerts.

The debt of families and companies with banks experienced an increase of 13,667 million in June, just before the summer holidays, up to 1,206 trillion (millions of millions), according to data from the Bank of Spain. This is an increase breaks the downward trend of the last three months and that is explained by the non-mortgage part.

He home loan stock It continues to be the bulk of the outstanding balance of loans on the banks’ balance sheets, with 501,577 million, although it is a declining figure. So far this year, this figure has fallen by almost 8,500 million. What is not going down is non-mortgage debt, which in fact experienced a record rise in June.

Specifically, this item, according to data from the Bank of Spain, increased by 11,240 million, or 6.3%, up to 189,141 million. This is the highest increase in the historical series, which begins in 2003. This item includes both consumer credit and a mixed bag, which is credit for other purposes, and which are all loans that are not recorded by banks, by providing their statistics to the Bank of Spain, neither as mortgages nor as consumption.

The non-mortgage debt of families, in addition, reaches the highest number since November 2019, and continues to gain weight in banks’ balance sheets. In fact, there has been a general increase in this segment in banks, as seen in the presentations of results, especially in Bankinter and CaixaBank.

The increase in liabilities is caused both by new operations and by a lower rate of amortizations or maturities of the loans, despite the fact that there is a trend this year of withdrawal of deposits by families, and one of the uses is precisely to cancel debts. However, households that have the capacity to save for this focus on partially or totally repaying variable-rate mortgages, to avoid the damage caused by the increase in the Euribor.

The two Spains: the families that pay off their mortgage and those that ask for consumer credit

Oscar Gimenez

Attending only to new operations, in credit cards and revolving was 11,806 million, in consumer loans for less than one year, 360 million, from one to five years, 1,156 million, another 1,376 million in loans from five to ten years, and a total of 1,373 million in periods of more than five years.

Another way to see the trend of consumer credit is with the figures of the financial establishments of credit (EFC), which are companies that bring together a large part of these loans. Although not all, since there are banks that have the segment in the credit institution itself and not in subsidiaries. But it serves to see the evolution of family debt and delinquency.

What can be seen in this section of statistics from the Bank of Spain is that the outstanding balance of EFC loans increased in June by 1,479 million, up to 45,181 million. The good news is that the volume of doubtful loans has decreased. Although it did so slightly, from 2,877 million to 2,859 million, it temporarily turns off the alarm that had gone off with a continuous increase in arrears during the previous three months. In June, the EFC delinquency ratio fell from 6.58% to 6.33%.

Families raised their non-mortgage debt with banks like never before in June, with the highest monthly increase in history. Household liabilities for consumer credit and other loans that do not correspond to home purchases rose by 11.240 million. The positive part is that there was a decrease in delinquency after several previous alerts.