Spanish financial institutions reported a notable uptick in mortgage lending during July, with the average rate for new loans to acquire free housing rising to 1.986%. This marks the highest level seen since June 2019, when rates briefly topped the 2% threshold, according to data published by the Bank of Spain in the Official State Gazette (BOE). The movement reflects a broader tightening trend in Spanish credit conditions as lenders adjust to evolving market dynamics and the broader euro area rate environment. (Bank of Spain)
The increase persisted for the third straight month, with the average mortgage loan rate over a three-year horizon climbing to 1.986% in July, up from 1.799% in June. A year earlier, the rate stood at 1.45%. This rise aligns with adjustments in funding costs and risk assessments that mortgage providers apply when pricing loans tied to housing purchases. (Bank of Spain)
July also saw Euribor, the benchmark index used to reference most Spanish mortgage rates, close at 0.992%. The rate continues a climb that began in early 2022, surpassing the 0.852% level registered in June. As Euribor trends upward, many borrowers may see changes in the cost of existing and new loans, depending on their loan type and reset arrangements. (Bank of Spain)
In the euro area overall, the average rate for mortgage loans with terms ranging from one to five years for the purchase of free housing issued by credit institutions rose to 2.03%, compared with 1.86% in the previous period. This broader eurozone movement mirrors the squeeze on financing costs seen in Spain, underscoring how regional monetary policy and market liquidity are shaping loan pricing across member states. (Bank of Spain)