Mortgages in Spain Experience 10% Drop and Highest Interest Rates in Nearly 10 Years at Start of Year

Mortgage Market in Spain: January 2024 Marks 12th Month of Negative Rates with Increase in Average Interest Rate

Spain’s mortgage market experienced a 10% drop in January 2024 compared to the same month the previous year, according to data from the National Institute of Statistics (INE). This marks the 12th consecutive month of negative rates, although it was not as pronounced as the previous month.

The average interest rate for home mortgages in Spain was 3.46%, which is the highest since December 2014. The European Central Bank’s (ECB) rate policy and Euribor evolution have contributed to this increase. About 42% of mortgages were at a variable rate and 58.2% at a fixed rate. The average interest rate for variable rate mortgages was 3.24%, while for fixed rate mortgages it was 3.64%.

In terms of monthly changes, home mortgages increased by almost 33% in January compared to December 2023, with capital lent also increasing by around 30%. Despite this, Beatriz Toribio, general secretary of the Association of Builders Promoters of Spain, stated that the overall trend in mortgage financing indicates moderation. It is predicted that this trend will continue in coming months as the ECB is expected to lower interest rates.

The autonomous communities with the most mortgages on homes in January were Madrid, Andalusia and Catalonia. Some regions experienced a decrease in home mortgages compared to the previous year, with only a few regions showing an increase. Changes in mortgage conditions have also decreased noticeably, with growth seen in entity changes.

Overall, there was a decrease of around 11.1% in the number of mortgages on rural and urban properties granted compared to January 2023 from last year’s total capital granted for these loans.

Expert anticipate changes in the mortgage market due to falling interest rates and increased competition among financial institutions.

According to data from INE published on Tuesday


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