In October, the number of home loan agreements fell by more than twenty percent compared with the same month a year earlier, according to the National Institute of Statistics. A total of 31,921 mortgage loans were recorded, marking a notable contraction in demand for housing finance and signaling sustained caution among borrowers. The average interest rate on these housing loans rose to 3.32 percent, the highest level seen since December of the year 2015, highlighting a continued tightening of credit conditions for buyers in the Spanish market.
Despite the year over year decline, October still stood out for its persistence of higher financing costs, placing it among several consecutive months with negative annual comparisons. The month was less severe in its drop than September, which posted a sharper decline, reinforcing a trend of cooling mortgage activity across the sector.
The average mortgage amount arranged for housing purchases also declined, falling by 5.3 percent from a year earlier. The total borrowed capital reached around 140,564 euros per loan during October, and the aggregate funding for housing mortgages approached 4.487 billion euros, illustrating how higher rates are compressing the total volume of new borrowing even as individual loan sizes remain substantial.
The driving force behind these dynamics is the European Central Bank policy of raising interest rates to curb inflation, which has translated into higher Euribor metrics and an elevated average rate on housing loans. In October, the combined rate across all housing loans stood at 3.70 percent, the highest since 2014, with the typical loan repayment period stretching over roughly twenty-three years. These figures reflect a market adjusting to tighter credit terms while still supporting long term access to financing for housing needs.
On the housing front, the October data also show a peak in the average interest rate, which reached 3.32 percent — the highest observed since December 2015 — alongside an average maturity extending to about 24 years. Year over year, the average cost of mortgage debt rose by roughly 1.18 percentage points, underscoring a seventh consecutive month in which rates exceeded the three percent mark. This combination of higher rates and longer maturities continues to shape borrower behavior and lender risk assessment across the sector.
Regional patterns in October highlighted where activity was most pronounced. The autonomous communities reporting the largest number of new home mortgage registrations were Andalusia, Catalonia, and Madrid, with 6,630, 5,817, and 5,061 loans respectively. In terms of the capital funded, Madrid led the way with about 1,051.4 million euros, followed by Catalonia with 953.4 million euros and Andalusia with 849.9 million euros. These figures underscore the uneven distribution of mortgage demand and lending across the country, influenced by local housing markets, incomes, and credit access considerations.