Spain’s Mortgage Market: Interest Rates and Loan Activity in January 2024

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

The Spanish mortgage market saw a 10% drop in loans compared to January 2024, with 33,128 loans recorded, according to the National Institute of Statistics (INE) published on Tuesday. Despite this decline, the focus is on the average interest rate, which continues to rise and is now at its highest point since December 2014.

This marks the 12th consecutive month of negative rates, although it is the least pronounced drop compared to the previous month. The average amount of mortgages on homes decreased by 2.7% year-on-year in January to €138,149 euros, while the capital lent decreased by 12.7% to €4,576.5 million euros.

The European Central Bank (ECB) and the evolution of Euribor have driven the average interest rate for home mortgages in Spain up to 3.46%, with an average term of 24 years. Approximately 42% of mortgages were at a variable rate and 58.2% at a fixed rate. The average interest rates for variable rate mortgages were 3.24%, and for fixed rate mortgages were 3.64%.

Mortgage financing showed a moderate trend in January as home mortgages increased close to €33% compared to December 2024 and capital loaned increased by €30.7%. Beatriz Toribio, general secretary of the Association of Builders Promoters of Spain, stated that this trend will continue as she predicts that interest rates will fall due to expectations from the ECB lowering them in coming months.

The regions with the most mortgages on homes in January were Madrid, Andalusia and Catalonia while some regions experienced a decrease in home mortgages compared to the previous year with only a few showing an increase.

Overall, changes in mortgage conditions have decreased significantly with notable growth in entity changes.

Experts anticipate changes in the mortgage market as interest rates fall and competition among financial institutions intensifies.

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