In July, 43,372 home loans were signed across Spain. The average mortgage needed to enter the market rose 10.9% in a year, reaching 180,785 euros, while the number of mortgages fell 3.5% over the same period. First-time buyers face mounting pressure as home prices rise and lenders demand stronger finances.
Banks generally lend no more than 80% of a property's valuation. Taxes and other purchase costs can add around 10% of the price, so buyers may need close to one third of the property's value before a bank will consider a loan.
The proposed Tu Casa mechanism was designed as a state-backed, zero-interest loan through the ICO. Access criteria, but, had not been fully specified when the measure was announced.
The issue took on greater political weight after Maricarmen, an 87-year-old woman from Madrid's Retiro district, was evicted. Her case provoked social and parliamentary backlash.
Congress rejected the Government's housing decrees. The package included a proposed zero-interest public loan covering up to 20% of a property's valuation, capped at 50,000 euros with a 10-year term. It would have covered the portion banks usually leave unfunded.
The loan never became available.
The official structure was Royal Decree-Law 26/2026. It defined TU CASA as an addition to bank mortgage financing for a first home used as a basic residence, not a replacement for a commercial mortgage.
Regional prices are widening the gap between borrowers. Spain's average monthly mortgage payment is 825 euros, information from Miquel Riera of HelpMyCash. It reaches 1,342.1 euros in the Balearic Islands and 1,311 euros in the Community of Madrid.
Murcia's average payment is 541 euros; Extremadura's is lower, at 466.4 euros.
Ordinary wages do not easily cover those payments. Spain's average gross monthly salary is 2,385.6 euros, while the most common salary is 1,377 euros.
Tinsa's national affordability measure reached 36.9% of disposable income in the third quarter of 2026, up from 35.7% in the previous quarter. Tinsa says households spend that share of disposable income on the first year's mortgage payments when a loan covers 80% of a home's market valuation.
Madrid's figure is 65.6% of disposable income. Barcelona stands at 64.1%, Málaga at 54.5% and Valencia at 46.9%.
Tinsa says pressure is critical in major capitals and employment hubs, as well as in some tourist municipalities with many foreign buyers.
Higher interest rates are steering the mortgage market toward mixed products. Euribor reached 3.24% in September, its highest level since 2024, prompting many customers to move away from variable-rate loans.
A mixed mortgage begins with a fixed period before switching to a variable rate. Borrowers get short-term certainty, while banks remain exposed to future Euribor changes.
Riera considers a fixed period of three to five years acceptable. Current offers start at nominal rates between 2.5% and 2.75%. He warns that online advertising can differ substantially from the terms customers eventually sign.
Sabadell offers a mixed mortgage at 1.8% for the first three years. The rate then changes to Euribor plus 0.7%. The loan has a 3.72% annual percentage rate and comes with several linked products.
Its five-year fixed option starts at 2.10%. It then moves to Euribor plus 1%, with a 3.78% annual percentage rate.
Pibank advertises a rate of 1.99% for four years. It then becomes Euribor plus 0.68%. The loan has no fees but requires an account and damage insurance.
Fixed-rate loans remain available. Ibercaja lists a 3.8% annual percentage rate without linked products and 3.49% with them. The offer applies to loans of at least 100,000 euros, financed up to 80% over 25 years.
Cajamar offers a nominal rate of 2.85%. Borrowers must meet conditions including salary and bill payments, along with insurance and card use. Without those conditions, the rate rises to 3.65%.
Public support has not removed banks' final veto. Joan Balasch of Housfy says lenders reject 80% of applications for public guarantees used to complete a mortgage, even when applicants meet the ICO's age or income requirements.
Antonio Gallardo of Asufin says financing the full valuation produces a monthly payment many households cannot afford.
Supply is the deeper constraint. The Bank of Spain estimates a housing deficit of one million homes by 2028.
The Consejo General del Notariado says 56.1% of purchases were financed with a mortgage. The remaining 43.9% were completed without bank financing. Some buyers used an inheritance or had enough cash, as discussed in earlier housing coverage.
The market offers no easy answer. Banks are still granting mortgages, but access increasingly depends on savings, two incomes or the sale of an existing property.
Mixed mortgages may cushion the immediate impact of rising Euribor, but they do not close the gap between house prices and household incomes.
The rejected public-credit proposal and limited guarantee schemes have not changed the arithmetic. For first-time buyers in Spain, the basic problem is no longer finding a loan; it is having enough money and income to qualify.
