Mortgages in Spain 2023
Spanish lending Dec 2023 and YTD saw a sharp decline. This is a reflection of the difficult year in terms of rates and inflation worldwide.
December Spanish Mortgage levels
December itself saw a total number of Spanish mortgage completions of 24.927. This was a decrease over November of 23.6%. Also down against Dec of 2022 by 17%. Only Madrid saw an increase in the month.
The average loan size of a mortgage in Spain dropped by 3.7% over the previous month. Against December 2023 decreased by 2%. The average size of home loans in Spain for December was €140.451
Both these statistics had an impact on total money lent. Capital lent in December was 3.501.034. A decrease of 26.5% on November. Down by the same over Dec last year.
Interest rates for Mortgages in Spain
Average interest rates went up by a small margin over November. December interest rate was 3.32%. In November 2023 this was 3.27%. During the year there was a significant rate hike due to ECB base rate. In December 2022 average interest rates on a Spanish mortgage was 2.66%.
In December last year you could obtain a fixed rate of 2.92%. December 2023 this was up to average 3.85%.
Variable rates as a product type, December 2022 2.17%. However December 2023 the rate was 3.47%.
Fixed versus variable rates in Spain
The split of fixed to variable rates for mortgages in Spain, remained fairly static. In total 54.2% were contracted om a fixed rate. 45.8% on a variable rate mortgage type.
This is down from its peak of over 60% on fixed rates. Suggesting borrowers are starting to opt for variable rates more frequently. This could be because they think in the shorter to medium term the base rate will fall. Consequently the Euribor will fall.
There is a much higher level of flexibility on over payments with variable rates also. For fixed rates the Spanish Banks may charge up to 1.75% redemption penalty for first 10 years. Up to 1.5% for full term. For variable rates the maximum penalty is 25% and expires after 5 years.
Non resident mortgages in Spain
Lending for foreign buyers dipped in 2023. As did sales of property. Only Andalucía of the coastal regions had a decline less than average. This may be because they dropped their purchase tax level during Covid. As yet the lower purchase remains in place.
Spanish Banks
A total of 29.186 mortgages in Spain were cancelled or redeemed. So a net outflow of capital for the Spanish Banks.
Full year data lending in Spain
As for the month Spanish lending Dec 2023 and YTD fell. For the full year, total number of new Spanish mortgages was 381.560. Down 17.8% on 2022.
Capital lent was 54.209.626 decreasing by 19.4% on 2022.
Average loan size at 142.074 was down by 2%.
Spanish lending still above pre Covid levels
Despite these figures the drop was not as high as the increases seen post Covid in 2021 and 2022. This means in reality the Spanish lending market remains up on pre Covid levels.
Projection for 2024
Early indicators for 2024 seem to be showing an uptick in mortgage new enquiries.
In particular from UK nationals.
Brexit. Changes to Visa rules and economic concerns have had an impact in last couple of years. Gradually those looking for holiday or investment homes seem to be creeping back.
Possibly also a belief interest rates have peaked.
A subdued market in 2023 has kept a cap on property prices. Buyers requiring Spanish finance may wish to take advantage of this. Before lower rates start to have an impact on house prices.