Spain | Mortgage rates decrease by 10% at the start of the year, reaching nearly decade-high interest levels

The Spanish mortgage industry experienced a 10% decline in the number of loans issued in January 2024 compared to the same month last year, according to data from the National Institute of Statistics (INE). Despite this drop, the average interest rate for home mortgages continued to rise and reached its highest level since December 2014.

One factor contributing to the rise in interest rates is the policy adopted by the European Central Bank (ECB) to combat inflation and the evolution of Euribor. As a result, home mortgages increased by almost 33% from December 2023 to January 2024, while loaned capital also increased by over 30%.

In terms of inter-monthly rates, there was a trend towards moderation in mortgage financing due to rising financing costs. However, it’s worth noting that about 42% of mortgages in Spain were taken out at a variable rate in January, while 58.2% were fixed-rate mortgages. This suggests that borrowers are still seeking stability and predictability in their mortgage payments.

Looking at regional trends, Madrid, Andalusia, and Catalonia had the highest number of home mortgages in January 2024. On the other hand, 14 regions saw fewer mortgages on homes than in the same period in 2023. Notable declines were seen in Asturias, Navarra, Cantabria, and Andalusia. There were increases in Madrid, Galicia, and Aragón.

The total number of mortgages with changes in their conditions also decreased by almost 6% year-on-year. Modifications within the same institution grew as did entity changes. The number of mortgages on rural and urban properties fell by over 11% compared to December last year.

Experts predict that mortgage interest rates will continue to change throughout

By Riley Johnson

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