Decrease in the number of mortgages taken out in Spain due to rising costs

by Lorraine Williamson
rising property costs

MADRID – The number of residential mortgages fell for the third consecutive month compared to the same month last year, to 27,053 loans in total. That is a decrease of 18.3%. Rising costs are the main cause. 

This is according to data from the Spanish National Institute of Statistics (INE). Analysts attribute this decline to the rise in real estate prices and the rising costs of home financing following the recent interest rate hikes by the European Central Bank. After the collapse in April, the decline in the number of mortgages taken out continues the downward trend that started in February with a fall of 2%. This continued in March with a fall of 15.7%. 

Also read: Euribor above 4% for the first time since 2008 

The average mortgage amount has also decreased 

The data from the INE shows that the average amount of mortgages for homes also decreased in April, by 4.1% year-on-year, to €136,945, while the total amount borrowed fell by 21.6% to €3,704.8 million. 

The average interest rate increased 

What has increased by 1.32 points compared to the previous year is the average interest rate that banks charge for home financing, which has reached 3.09%. 

Fixed mortgages, the preferred choice 

In April, 38.7% of residential mortgages were concluded at a variable interest rate and 61.3% at a fixed interest rate. The average interest rate at the start was 2.78% for floating-rate mortgages and 3.29% for fixed-rate mortgages. 

Furthermore, the total number of mortgages with changes in terms registered in the Land Registry in April was 9,907. That is a decrease of 23.1% compared to the previous year. 

Cogesa Expats

The most important changes were related to contract changes with the same financial institution, which accounted for 7,851 cases. Moreover, the number of refinancings, in which the lender was switched, increased by 1.5%. 

Andalucia leads the statistics 

The region with the highest number of residential mortgages taken out in April was Andalucia, with 5,473 loans. This was followed by Catalonia with 4,477 and the Autonomous Community of Madrid with 4,373. 

Madrid was the region where the most capital was provided, with €882 million, followed by Catalonia with €97.8 million and Andalucia with €648.1 million. Moreover, capital provided fell in all regions, with the province of La Rioja leading the way with a decline of 41.4%. 

The only region with a positive annual variation in the number of residential mortgages was Aragon, with an increase of 31.5%. The largest decreases in annual percentages were observed in La Rioja (-30.9%), the Balearic Islands (-28.4%) and Catalonia (-27.0%). 

As for the average mortgage amount for all registered properties in April, it was €158,321, a decrease of 1.1% compared to the same month in 2022. 

Also read: More than half of the houses in Spain bought without a mortgage 

ASSSA

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