Spanish Mortgage Market Shifts Amid ECB Rate Hikes

Spain’s mortgage market has undergone a notable shift driven by the European Central Bank’s rapid rate increases from mid-2022 through late 2023. The move aimed at curbing inflation reshaped the mix of home loans in the country. Variable-rate mortgages, once dominant for home purchases, fell from about 59 percent of the roughly five million outstanding loans in December 2021 to around 51 percent in December 2023. At the same time, fixed-rate loans rose from 20 percent to 32 percent, while hybrid loans that start fixed and later switch to variable declined from 21 percent to 17 percent, according to data from the Bank of Spain.