While the total volume of signed mortgages fell at its sharpest rate since June 2024, the average loan amount surged by nearly 11% to reach a record 181,000 euros.
Mortgage Volume Drops as Loan Sizes Reach Record Highs
The July figures illustrate a growing divergence between transaction volume and total debt required per purchase. Equito spokesperson Robin Decaux stated that this moderation in the number of operations—coupled with an expanding volume of financing—shows that each individual purchase requires increasingly higher levels of debt. Decaux noted that this trend creates an additional barrier for prospective buyers trying to enter the property market.
Finteca’s head for Spain, Yogi Thadhani, pointed to a persistent lack of housing supply as the primary driver behind mounting price pressures. Thadhani noted that over 62% of buyers currently choose fixed-rate mortgages. Meanwhile, Ricardo Gulias, chief executive officer of RN Tu Solución Hipotecaria, observed that the market maintains an active buyer base alongside financial institutions eager to extend credit. Gulias added that steady price increases force buyers to borrow more money simply to complete standard transactions.
Trioteca CEO and cofounder Ricard Garriga characterized buyer demand as strong. However, Garriga warned that recent increases in the euríbor benchmark and the expected rise in fixed-rate mortgage costs could trigger a gradual market slowdown over the coming months.
Interest Rates and Loan Conditions in July
Interest rate averages for newly constituted residential mortgages settled at 3.01% in July, climbing above the 3% threshold for the first time since January 2025. According to the INE data, the average repayment term stood at 26 years. Fixed-rate loans accounted for 62.3% of the total, while variable-rate mortgages represented 37.7%. Broken down by structure, the initial average interest rate reached 2.97% for variable-rate mortgages and 3.03% for fixed-rate agreements.
Modification activity across existing loan agreements fell 18.6% year-over-year in July. Novations, or alterations negotiated directly with the same lender, declined by 19.3%. Subrogations transferring the debt to a new debtor dropped by 19.6%, while subrogations transferring the loan to a different creditor fell by 3.8%. The INE reported that 82.0% of the 10,926 mortgages that underwent altered conditions were modified specifically to adjust interest rates.
Regional Disparities Across Spain
Mortgage trends varied significantly across Spain’s autonomous communities. The Balearic Islands recorded the largest annual increase in residential mortgage approvals at 8.6%, followed by Asturias at 8.1% and Galicia at 7.1%.
Conversely, the sharpest declines occurred in Cantabria, where mortgage approvals dropped by 26.9%. Aragón experienced a 20.5% decrease, and La Rioja registered a 19.7% reduction in year-over-year mortgage activity.