10% Drop in Spanish Mortgage Market: What You Need to Know

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

The Spanish mortgage market began the year with a 10% drop compared to January 2024, according to data from the National Institute of Statistics (INE) published on Tuesday. This marks 12 consecutive months of negative rates, although it is the least pronounced drop compared to the previous month.

The focus is on the average interest rate, which continues to rise and is now at 3.46%, the highest since December 2014. The overall trend in mortgage financing indicates a moderation, as stated by Beatriz Toribio, the general secretary of the Association of Builders Promoters of Spain. It is predicted that this trend will continue in the coming months as the European Central Bank is expected to lower interest rates.

In terms of monthly changes, home mortgages increased close to 33% in January compared to December 2024, while the capital loaned increased by 30.7%. 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, with notable growth in entity changes.

Overall, experts anticipate changes in the mortgage market as interest rates fall and competition among financial institutions intensifies. With an average interest rate for variable rate mortgages at 3.24% and fixed rate mortgages at 3.64%, borrowers have more options when it comes to choosing their mortgage terms. Additionally, some autonomous communities saw an increase in rural and urban property mortgages compared to December 2024, while others saw a decrease.

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