Spain Mortgage Market: 16.6% Surge in Home Loans  

Spain Mortgage Market: 16.6% Surge in Home Loans

The Spain mortgage market reports a 16.6% rise in home signings, with average rates at 3.28% and loan amounts hitting €153,190, the highest since 2020.

In a significant development within Spain’s mortgage market, the signing of home mortgages surged by 16.6% in November 2024 compared to the same month in the previous year. This increase coincided with a rise in the average interest rate, which reached 3.28%, up from 3.12% in October. This marks the highest interest rate observed since August 2024, when it was recorded at 3.30%.

The average mortgage amount also saw a notable increase, climbing 6.4% year-on-year to 153,190 euros, the highest figure since February 2020. Additionally, the total capital lent surged by 24.1%, amounting to 5,897.3 million euros. These figures indicate a robust demand for mortgage financing, despite the upward pressure on interest rates.

According to data released by the National Institute of Statistics (INE), the number of loans constituted on homes reached 38,497 in November 2024. This figure reflects a consistent trend, as mortgage signings have now experienced five consecutive months of growth, albeit at a more moderate pace compared to the dramatic 60.8% increase seen in October.

The composition of mortgage types revealed that 37.3% of mortgages were constituted at a variable rate, while 62.7% were fixed-rate mortgages. The initial average interest rates for these categories were 3.23% for variable-rate mortgages and 3.31% for fixed-rate mortgages. However, when comparing November 2024 to October of the same year, there was a month-on-month decline of 25.3% in the number of mortgages and a 24% decrease in the capital lent, suggesting a seasonal adjustment in the market.

Throughout the first eleven months of the previous year, the metrics for mortgages—including the number of loans, capital lent, and average amounts—demonstrated increases of 9.9%, 12.4%, and 2.3%, respectively. Regionally, the highest number of mortgages constituted on homes in November 2024 were recorded in Andalusia (7,163), Catalonia (6,862), Madrid (6,468), and the Valencian Community (4,342). Notably, fourteen autonomous communities reported an increase in mortgage signings compared to November 2023, with La Rioja (89%), Aragon (60.6%), Asturias (44.1%), and Galicia (40.4%) leading the way in year-on-year growth.

In contrast, the most modest advances were observed in Andalusia (3.6%) and Murcia (15.5%), while decreases were noted in Cantabria (-4.5%), Madrid (-2%), and Castilla-La Mancha (-0.2%). Furthermore, the total number of mortgages on both rural and urban properties rose by 15.4% in November compared to the same month in 2023, culminating in a total of 50,005 loans.

The overall capital of mortgage loans granted experienced a substantial growth of 23.4% in the penultimate month of last year, reaching 8,640.4 million euros. The average amount of mortgages constituted across all properties increased by 6.9% year-on-year, now standing at 172,791 euros.

In terms of mortgage condition changes, a total of 9,727 mortgages underwent modifications, reflecting a 17.3% decrease from the same month in 2023. Among these, 8,579 were novations—modifications made with the same financial institution—down 7.7%. Conversely, the number of transactions involving a change of creditor (subrogations to the creditor) plummeted by 88.4% to just 211. However, there was a notable increase of 43.3% in the number of mortgages where the owner of the mortgaged property changed (subrogations to the debtor).

The current landscape of Spain’s mortgage market is characterized by a complex interplay of rising interest rates, increasing loan amounts, and regional disparities, all of which contribute to a nuanced understanding of the sector’s trajectory as it navigates the challenges and opportunities ahead.

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