This report outlines how households in Spain managed to save substantial funds last year, particularly in the latter half, and how early mortgage repayments affected monthly quotas amid the rapid Euribor rise. The balance for housing loans dipped to a low point of 0.07% with a maximum of 510,957 million, and then looked to rebound in 2021. The new operation total reached 65,220 million. If 2022 depreciation (cash loans plus those maturing) rose to 389 million, 65,609 million, Bank of Spain data indicate a shift in the trend that year.
The mortgage balance began to fall toward the end of August, and for the first time since the end of 2020, repayments exceeded new lending. Many families, armed with savings, consulted banks about how much to repay in advance. Quotas stayed largely steady despite Euribor rising. In large cities where loan amounts were higher, people could largely manage these repayments. Families with more savings and higher rents faced a different dynamic, but the trend appeared to be spreading, according to financial sources.
Analysts note that the current trend is likely to persist this year. The Economy Ministry, in November, indicated there would be no commissions for early repayments throughout 2023, and a switch from variable to fixed rates remained possible. In January and February, the mortgage balance showed an additional 4,800 million, despite a new mortgage of 8,098 million, which is 13% higher and 1.212 million lower than the first two months of 2021. Overall depreciation reached 12,898 million, up from the previous year, according to data from the Bank of Spain.
triggered euribor
Families capable of making upfront payments found that the Euribor surge over the past year kept mortgage costs rising. The European Central Bank uses Euribor as a benchmark to curb inflation. Spain’s variable-rate mortgages moved from a historical low toward higher levels, with Euribor turning from negative territory to positive values. In December 2021 the rate was -0.502%, marking a historical low, while 2022 saw around 3.018%, and by March of the current year banks reported average rates near 3.647%.
The jump in Euribor has meant monthly payments for variable-rate home loans have increased, sometimes by three percentage points or more above previously contracted differences. As Euribor rose in the reference month, payment amounts climbed, with a comparison to late 2022 showing a return toward earlier peak levels. In the near term, the rate will be weighed against the highest points reached in the latter half of 2022, which tends to soften quotas as the year progresses.
The rise also slowed the movement of the average portfolio ratio for bank mortgages, which bottomed around historical minimums in late 2021 and climbed toward higher levels by February. The average interest on mortgage balances increased at a notable pace, affecting both floating-rate and fixed-rate loans. The all-time low average rate of 1.382% in December 2021 rose to about 3.431% by February, marking a peak not seen since early 2012.
containment factor
Defensive early repayments of homes appear to dampen the pace of new mortgage pricing. Even with higher rates and Euribor, lenders have not shown strong price movements for new mortgages. A decline in unpaid balances has helped accelerate existing loans, while competition among lenders remains intense, making attractive mortgage offers possible, according to Juan Villén, the mortgage general manager at Idealista.
In Spain, overall costs for mortgages remained higher than the eurozone average. Between December 2021 and the latest data, both the balance and new lending rates moved up: balances rose from 1.63% to 2.05%, and new loans climbed from 1.31% to 3.24%. Deposits continued to rise—0.86% for new deposits and 0.32% for balances in February—still well below euro-area levels, explaining why Spanish banks sought higher profitability from retail customers.
Despite this pricing, economic uncertainty led Spanish households to reach an all-time high of €1.078 trillion in cash and deposits last year, up 4.2% from 2021. Yet total financial wealth—assets minus liabilities—slipped 0.2% to about €1.95 trillion, and investments in mutual funds, equities, life insurance, and pensions declined amid inflation and the war in Ukraine.