Banks registered 43,372 home purchase loans in Spain in July, 3.5% fewer than a year earlier and 5.5% below June. The year-to-date increase fell to 5.4%.
July made for a tough comparison: the same month last year was the strongest July for mortgage signings since 2010, information from Fotocasa. The latest drop is the clearest sign yet that the housing cycle may be turning. Summaries of the latest INE data describe it as the most pronounced annual fall in mortgage signings since June 2024.
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 as property prices keep rising and financing costs climb. INE-based reports say both resale homes and new-build properties were affected.
The pressure 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%, adding to the monthly cost of buying a home even as banks continued lending.
Borrowing is getting more expensive, and 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 as the number of signed mortgages fell.
The numbers explain the apparent contradiction. Buyers remain 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 basic reference indicators for the Spanish mortgage market.
Borrowers face a clear trade-off. Waiting could mean a higher mortgage price and a larger debt, as 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.
