Banks registered 43,372 home purchase loans in Spain in July, the sharpest annual drop in 25 months. Buyers took on larger debts as house prices and borrowing costs made access harder.
Banks registered 43,372 home purchase loans in Spain in July. That was 3.5% fewer than a year earlier and 5.5% below June. The year-to-date increase fell to 5.4%.
July was a rough comparison. The same month last year was the strongest seventh month for mortgage signings since 2010, according to Fotocasa. The latest drop is the clearest sign yet that the housing cycle may be turning.
The July decline was the most pronounced annual fall in mortgage signings since June 2024, according to summaries of the latest INE data.
The wider property market had already started to weaken. Home sales fell 5.1% year on year in July to 61,417 transactions. Fewer households can now reach the purchase stage because property prices keep rising and financing costs are moving higher. INE-based reports say both resale homes and new-build properties were affected.
The squeeze is real.
The average mortgage rate reached 3.01% in July, up from 2.96% in June. It was the first time in a year and a half that the average had risen above 3%. That added to the monthly cost of buying a home, even as banks continued to lend.
The combination of fewer transactions and larger loans points to a market under pressure from both sides: demand is weakening while the amount required to buy a home is rising. The sales figures therefore reinforce the warning coming from mortgage registrations rather than representing an isolated credit-market movement.
Borrowing is getting more expensive. Loan sizes are rising too.
The average mortgage grew 10.9% to a record €180,785. Total bank lending for home purchases rose 7% year on year to €7.841 billion, even though the number of signed mortgages fell.
The numbers explain the apparent contradiction. Buyers are still active, and lenders are still approving credit. Yet each property now costs more, so households must borrow more to complete the same purchase. Ricardo Gulias, chief executive of RN Tu Solución Hipotecaria, described the market in those terms.
The pressure behind the record loan size was detailed in an earlier report. July adds a sharper warning. Larger loans are no longer producing steady growth in completed mortgage deals.
Interest rates could create another obstacle. The Euribor closed at 3.37% on a daily basis and was heading towards a fourth consecutive monthly increase. Trioteca said fixed-rate offers are likely to become more expensive towards the end of the year if the index stays near or above 3%. The Bank of Spain identifies Euribor and official mortgage-rate measures as key reference indicators for the Spanish mortgage market.
For borrowers, the message is direct. Waiting could mean a higher mortgage price and a larger debt because house prices are already pushing the average loan to a record level. July was more than a monthly dip. It showed access narrowing even as banks continued to provide credit.
