Getting a mortgage is tough. Banks have tightened the gate with higher interest rates and more stringent checks. Inflation, job uncertainty, and a slowing economy mean lenders demand greater guarantees before approving loans to buy property.
The Finanzate brokerage network notes in an ABC report that in the first quarter banks rejected one in three mortgage requests. Many lenders now refuse applications where estimated monthly payments exceed 35% of the borrower’s income, and the overall economic picture is nudging more people toward that ceiling. [Citation: ABC report, Finanzate network]
Housing loans fall in March
Data from the National Institute of Statistics (INE) shows 36,182 mortgages were signed for home purchases in Spain last March, down 15.7% from March 2022. This marks the largest March drop since January 2021. [INE statistics]
A poster announcing a mortgage in a file image. Joseph Navarro
Fixed-rate loans continued to outpace variable-rate offerings in new mortgage activity and accounted for 63.9% of cases, though this share dipped to a March low not seen since March 2021. Variable-rate loans represented 36.1% of housing loan requests. [INE data]
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The latest figures also show the average mortgage interest rate at 2.99%, the highest in nearly six years since April 2017. The fixed-rate average stood at 3.15%, the most expensive since April 2018, while the variable rate averaged 2.72%. [INE data]
The mean amount borrowed for homes was 142,663 euros, down 1.5% year over year, and total loaned capital reached 5,161.9 million euros, a 17% year-on-year decrease. In the first quarter, residential mortgages fell 5.6% and capital lent for housing mortgages declined 5.4%. [INE report]
On the records side, the total number of mortgages changing their terms in March fell 14.7% to 14,176, with 11,399 of those changes being refinancings within the same financial institution. [INE data]
Meanwhile, the number of mortgages where the asset’s owner changed (successor in title) dropped 8.1%, and the number of mortgages where the borrower changed (successor in debt) fell 3.1%. [INE statistics]
Additionally, 32.1% of all registry changes stemmed from interest-rate shifts. Fixed-rate housing loans rose from 13% to 40.2%, while floating-rate loans dropped from 85.6% to 58%. This trend signals a shift in how borrowers are balancing payment certainty against rate flexibility. [INE analysis]
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Euribor remains the benchmark rate for most variable mortgages, both before and after term changes, with 81% and 54.8% respectively. After changes, the average rate on variable mortgages nudged up by 0.1 percentage points, while fixed-rate loans also rose by 0.1 points. [INE data]
Autonomous communities with the most mortgages
The February leaders for residential mortgages were Andalusia with 7,280, Catalonia with 6,467, and the Community of Madrid with 5,515. In terms of total loaned capital, Madrid led with 1,200.2 million euros, followed by Catalonia with 1,050.4 million and Andalusia with 879.5 million. [INE regional data]
Asturias stood out as the only region to report an increase in March, up 0.8% in residential mortgages. By contrast, the Balearic Islands, the Community of Madrid (−23.7%), and Castilla-La Mancha (−22.1%) showed the largest declines. [INE regional trends]