Mortgage market Spain April 2024


Mortgage market improving in Spain

The mortgage market Spain April 2024, looks to be heating up after interest rates drop.

During the period of rising rates defaults have remained stable for the Spanish Banks. Unlike in the financial crisis of 2008. Repossessions went through the roof during that period.

The difference will be due to more careful lending and Bank of Spain mortgage regulation. The practice of building in stress factors, when underwriting. Also more diligent checking of documentation.

All of this will have a positive affect moving forward. For Spanish mortgages. As rates drop Banks in Spain will have the financial capacity to respond to the market.

Interest rates trends for loans in Spain

Interest rates for a mortgage in Spain may well drop quickly. Once the market is assured the trend downwards is here to stay.

The 12 month Euribor for revisions and completions of Spanish Mortgages, in June is 3.65%.

From a high of just over 4%.

Variable margins above are average 1.5% for non resident loans. Fixed rates for full term from 3.75%.

European Interest rates

Spanish mortgage completions in April

In April total loans in Spain reached 44.949. This was up 17.3% on March. An increase of 26.9% over same month of last year. However down still annually by 1.8%.

The capital lent reached 6.887.301m. An increase of 9% over last month. Up 21.4% over April 2023. But a decrease annually of minus 4%.

Average Spanish loan size was 152.557 up 1.,6% over previous month. Also up 1.5% over April 2023. Down 2.3% year to date.

Residential loans in Spain

For Mortgages in Spain contracted for buying a home the picture is similar.

Total loans for the mortgage market in Spain. 34.264. This is up 15.5% over March. Up 28% over same month of last year. Down 1.1% year to date.

Capital lent 4.77.934 m. An increase of 17.4% from last month. Increasing by 30% over March 2024. However year to date down 3.8%. Due to the first quarters downturn.

The average loan size for a residential property was 139.328. This is up 1.6% on the month. Plus 1.5% over previous year. Annually down 2.7%.

INE Spain statistics

Interest rates in Spain dropped marginally. The average rate for a Spanish Mortgage was 3.38%.

Of this the average variable Spanish home loan was 3.25%. The average fixed rate 3.51%.

Fixed rates made up 51.9% of all ne transactions. Variable rates 48.1%. This is a bit of shift in favour of variable.

Borrowers in Spain may be looking for the flexibility variable rates provide. As rates drop.

The headline interest rates reflect a new calculation. The INE who publish the data changed the way they calculate in 2023. They provide a formula that reflects their assessment of the average rate. Therefore the rate overtime from inception.  Its not clear why they would do this. It no longer is real statistic. But a prediction.

The practice means borrowers cannot expect to be offered a rate reflected in the published data. Only the projected average rate over the lifetime of the Mortgage in Spain.

Property market expected to increase

House sales are predicted to rise by up to 15% during 2024. Already there are more non resident Spanish mortgage enquiries. In comparison to first 3 months of year. Non resident borrowers in Spain generally buy in coastal areas. At the moment they do not seem put off by some of the protest by locals. In tourist hotspots. Whilst there is some back lash the media has over emphasized the severity.

Non residents buying and taking a Spanish Mortgage remain an integral part of the Spanish market. Also an important part of the local economic community.

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