Banks registered 43,372 new home loans in Spain in July, 3.5% fewer than a year earlier. The average mortgage reached €180,785, the highest figure recorded since this measure began in 2015.
The gap between those figures tells the story: fewer deals are closing, but each buyer is taking on more debt. The average amount rose 10.9% year on year as housing prices pushed borrowers to seek larger loans.
July still produced the second-highest total for that month in 16 years. Summer usually brings less activity, and the result follows the strong growth cycle recorded during 2025.
The market is not collapsing. It is becoming more selective and more expensive.
Financing conditions added to the strain. The average interest rate on newly signed mortgages reached 3.01%, its highest level since January 2025, when it stood at 3.08%. The European Central Bank raised rates for the second time since June at the beginning of the month, leaving rates at 2.5%, information from figures presented in the report. The ECB’s official July bulletin put bank lending rates for households at 3.5% across the euro area. That broader financing backdrop helps explain why Spanish mortgages remain costly even as the number of new loans slows.
Households are facing two changes at once: the number of transactions is falling, while the amount needed for each purchase is rising. This matters most to people who cannot buy a home without a bank loan.
Regional figures show where the decline was concentrated. Andalusia lost almost 1,200 operations in one month but remained Spain's busiest region. Madrid recorded more than 1,300 fewer signatures. The Basque Country and Aragon also recorded declines. The Valencian Community did too.
Catalonia moved the other way. It posted the strongest monthly increase among the largest markets, with more than 800 additional mortgages compared with June. The Balearic Islands and Galicia also advanced. Castilla y León posted a smaller gain in absolute terms.
The year-on-year picture is just as uneven. Catalonia added more than 400 mortgages compared with July of the previous year. Galicia and Castilla y León also recorded increases. The Balearic Islands posted a rise as well. Andalusia had the largest annual fall, with around 835 fewer operations. Madrid lost more than 300, while the Canary Islands recorded one of the sharpest relative declines. The Basque Country and Aragon also fell. Cantabria did too.
An earlier rate analysis showed why borrowing costs remain a major part of the housing story. The average rate of 3.01% continues to weigh on demand, while property prices are pushing buyers to seek larger loans.
Separate housing data from INE point in the same direction. Spain recorded 61,417 home purchases in July, down 5.1% from a year earlier. The fall was not spread evenly across the country: some autonomous communities still recorded growth, while demand weakened in others.
July's figures show financial pressure, though the market has not stopped. The volume remains high for the season, but the record average loan changes what that strength means for buyers. Spain is completing fewer mortgage transactions at a higher individual cost. Expensive homes and financing conditions are narrowing access to home ownership.
