Spain’s Mortgage Market Rebounds with Less Pronounced Drop in January 2025

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

Mortgage lending in Spain started 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 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.

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

The autonomous communities with the most mortgages on homes in January were Madrid, Andalusia, and Catalonia. 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, changes in mortgage conditions have led to an increase in monthly changes for both home mortgages and capital loans granted. Home mortgages increased close to 33% in January compared to December 2024, while capital loaned increased by 30.7%. This shows that despite rising interest rates and negative rate trends over

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