The Spanish mortgage market is experiencing one of its most intense periods in the last decade and a half. In October, [number] mortgages were formalized. 52.198 mortgages on housing, the highest monthly figure in 15 years and a clear indicator that the real estate financing It remains very active despite the rising cost of housing.
This volume of new mortgages comes accompanied by a average interest rate of 2,81%The lowest figure since 2023, with an average loan amount of €167.080. This combination of figures reflects a particularly dynamic end to the year, in which housing demand, seasonality, and somewhat more favorable financial conditions have aligned.
Record mortgages: the best October since 2010
According to the data of the National Statistics Institute (INE)The 52.198 mortgages registered on housing make October the busiest month since September 2010. This is not just a one-off peak: the number of loans has been steadily increasing. 16 consecutive months of year-on-year increasesThis confirms a sustained upward trend in mortgage lending.
In relative terms, the number of mortgages on housing was a 0,6% higher than in October of the previous year and 13,2% higher than September, when 46.120 transactions were signed. Thus, October not only breaks the year's record, but also clearly surpasses previous monthly figures for the year.
Looking at the year-to-date figures, the market is heading into the final stretch of the year with approximately 419.913 mortgages signed Regarding housing, it is very close to exceeding the 425.522 transactions of all of 2024. With two months still to be counted, several analysts point out that the year could close above the 500.000 mortgagesa threshold that had not been reached since before the financial crisis.
These figures place the current level only behind the records of 2010, when just over 524.000 home mortgages were reached. However, they are still far from the historical highs of the 2006 housing bubble, when more than 1,1 million loans were formalized.
Average amount and capital lent on the rise
The dynamism of the mortgage market is reflected not only in the number of transactions, but also in the volume of money mobilized. In October, the average amount of mortgages on housing It stood at 167.080 euros. Although this figure is 2,6% lower than in September, it remains well above that of the same month of the previous year, with a year-on-year increase of 10,4%.
This increase in the average amount explains why the total capital borrowed Mortgages for home purchases amounted to €8.721 billion, representing an 11% increase compared to October of the previous year. In other words, many mortgages are being taken out, but they are also, on average, larger.
If the focus is widened to all types of properties (not just homes), 66.960 mortgages were signed in October, a slight decrease of 0,5% in the number of transactions. However, the capital lent for all properties grew by 8%, to €12.225 billion, demonstrating that real estate financing in general remains strong.
In this context, some industry experts emphasize that the combination of high housing prices And the higher volume of credit is pushing the average amount upwards, despite small monthly corrections such as the one observed compared to September.
Interest rates: recent lows and a preference for fixed rates
Although the European Central Bank (ECB) does not currently anticipate a significant extension of official interest rate cuts, the monetary policy of recent months and the relative containment of inflation have allowed new mortgages to be signed with somewhat more favorable conditions.
In October, the average interest rate The interest rate on home mortgages stood at 2,81%, below the 2,85% recorded in September and at the lowest level since 2023. Since June, the average interest rate has accumulated four consecutive monthly declines, falling by almost two tenths in that period.
The relative stability of interest rates is supported by an inflation scenario around 3% in November And because of the ECB's latest decisions, which in October kept its benchmark interest rates fixed at 2% for the third time in a row. This environment, while not particularly cheap compared to other periods, has been sufficient to reactivate the negotiation of competitive conditions between banks and clients.
Regarding the market structure, 61,3% of mortgages on housing It was signed fixed rateWhile 38,7% opted for variable-rate mortgages. The average initial interest rate was 2,79% for variable-rate mortgages and 2,82% for fixed-rate mortgages, a practically symbolic difference that, even so, has not prevented the majority of households from continuing to choose fixed-rate mortgages. fixed rate security in the face of the uncertainty of the Euribor.
Changes in conditions: novations and subrogations
The evolution of interest rates and banking competition are also reflected in the behavior of existing mortgages. In October, a 17,6% of registered loans in the property records it showed changes to their conditionseither through direct negotiation with the entity or by transfer to another bank or account holder.
In total, the following were recorded 13.369 mortgages with modificationsAnd in 75,7% of cases, these changes were related to interest rates. In other words, a large proportion of borrowers are still trying to adjust their financing costs to the new market reality.
The novationsThat is, changes agreed upon with the same financial institution fell by 30,2% year-on-year. Meanwhile, creditor subrogations, in which the loan is transferred to another bank, dropped by 7,1%. These declines suggest that the large-scale cycle of intensive renegotiations seen in previous years is moderating.
In contrast, the subrogations to the debtorWhere the mortgage holder changes (for example, in property transfers with an associated loan), the number of transactions increased by 34,1%. This increase aligns with the higher number of sales and the high turnover of the housing stock in certain local markets.
Regional disparity
The increase in mortgages in October was not evenly distributed across the country. Among the regions with the highest volume of transactions are: Andalusia, Catalonia, Madrid and the Valencian Communitywhich remain the main drivers of mortgage lending for housing.
In absolute figures, Andalusia led the month with 10.301 mortgages established on residential properties, followed by Catalonia (9.025), the Community of Madrid (8.243) and the Valencian Community (6.739). These four regions concentrate a large part of the activity, driven by their population size, their dynamic labor market and the strong demand for housing, both from resident buyers and investors. Andalusia led the month with outstanding figures.
If we analyze the year-on-year change, the increases in Extremadura stand out, with a del% increase 16,1 In terms of the number of mortgages on housing, Castilla-La Mancha (15,6%), Cantabria (15%), and the Valencian Community (10,4%) saw increases. Navarra (2,8%), the Basque Country (2,2%), Catalonia (1,3%), Andalusia (0,6%), and Asturias (0,4%) also registered increases.
On the other hand, eight communities experienced year-on-year declines in the number of mortgages formalized. Aragon led the declines, with a drop of 10,7%, followed by Castile and León (-7,9%), Galicia (-7%), Madrid (-5,9%), the Balearic Islands (-5,1%), La Rioja (-2,7%), Murcia (-0,6%) and the Canary Islands (-0,4%).
If we compare the evolution with respect to September, the boost in October was supported by the monthly increase in signatures In almost all autonomous communities, with the exception of the Basque Country, the Balearic Islands, and Ceuta, where the number of mortgages decreased. In percentage terms, the most significant increases were detected in Asturias (47,8%), Cantabria (25,4%) and Castilla-La Mancha (27%), which shows a particularly lively end to the year in these areas.
Mortgage market outlook
The positive tone of the mortgage market goes hand in hand with a clear rebound in the home sales in the final stretch of the year. In October, 67.789 sales transactions were recorded, the highest figure of the year, driven in part by the gradual improvement of financing conditions and by the typical seasonality of the sector.
Market experts, such as those responsible for mortgage brokerage platforms and financial consultancies, point out that October is usually a strong month This is due to the culmination of searches and negotiations conducted during the summer. Many purchasing decisions are finalized after the summer period, resulting in a significant volume of deals being signed this month.
Even so, analysts agree that the October data not only reflects seasonality, but also confirms the strength of the mortgage market in a context of still high housing prices and interest rates that, although not as low as in years of very cheap money, have stabilized at levels affordable for a significant portion of households.
Looking ahead, the continuation of this pace will depend largely on the trajectory of inflation, on the future decisions of the ECB Regarding official interest rates and the evolution of employment and household disposable income in Spain, a more uncertain macroeconomic environment or a new round of interest rate hikes could cool the market, while stability or slight further cuts would provide room to maintain activity at high levels.
The current outlook paints a picture of a very active mortgage market, with record trading in OctoberLow interest rates, a predominance of fixed rates, and significant differences between autonomous communities all suggest that, barring any major economic shocks, financing for home purchases will continue to be a key driver of the real estate sector in the coming months.
