In 2026, Spaniards planning to buy a home with a mortgage will face noticeably tougher conditions. Banks are not only raising interest rates, but also imposing additional requirements on borrowers. For low-income families, this means the path to homeownership is becoming even more difficult. The situation is further complicated as the price per square meter continues to rise, while access to loans declines.
According to the Bank of Spain, the average interest rate on new mortgages reached 2.75% in February—the highest level in the past two years. Banks are now scrutinizing clients’ financial situations much more closely, assessing not only income but also job stability, existing loans, and even family status. As Talent24h notes, lenders are no longer engaging in price wars, instead focusing on minimizing risks and boosting their own profits.
Pressure on buyers
Housing prices in Spain continue to rise. In 2020, the average price per square meter was €1,720, but by February 2026 it had exceeded €2,800. In Madrid, Barcelona, and San Sebastián, prices have long surpassed €4,000 per square meter. For most families, this means that even with a down payment, monthly installments are becoming increasingly burdensome.
The situation is further aggravated by the rise of the euríbor index, which has increased for the first time in two years. This directly affects the amount of monthly payments on variable rate mortgages. For example, on a loan of 187,000 euros over 25 years, the monthly payment can range from 750 to 900 euros. In addition to that, buyers must set aside mandatory savings for associated costs—another 10–12% of the housing price. As a result, over the loan term, the total interest paid can exceed 90,000 euros.
Changes in demand
Despite tighter conditions, banks are not seeing a sharp drop in mortgage demand. In the first two months of the year, loans totaling 5.12 billion euros were granted, which is 2.1% more than the previous year. However, the growth rate has slowed considerably: last year, the increase for the same period was 22%. This suggests the market is gradually cooling off and buyers are becoming more cautious.
The situation is especially challenging for young families and those without a stable, high income. For them, new banking requirements are practically an insurmountable barrier. According to russpain.com, stricter mortgage conditions are not the only issue: many also face delays in receiving tax refunds, which further complicates financial planning (more about rental refund delays).
Outlook and risks
Experts do not expect the situation to change in the coming months. Banks continue to tighten their policies, while housing prices show no signs of decreasing. For many Spaniards, the prospect of buying their own home is being postponed indefinitely. At the same time, new players are emerging in the market—alternative lending organizations that offer less favorable but more accessible terms for those who do not meet the banks’ scoring requirements.
Banco de España is the country’s main financial regulator and regularly publishes reports on the state of the credit market and trends in mortgage lending. In recent years, the institution has repeatedly warned about the risks of overheating in the real estate market and the need for a more responsible approach to issuing loans. Similar situations occurred in Spain in the early 2010s, when a sharp tightening of lending conditions led to fewer transactions and more mortgage rejections. The changes seen today recall those times, but this time banks are acting more cautiously to avoid repeating past mistakes.
