Mortgage Rates Tick Up as Home Loan Applications Decline in Spain

The number of new mortgages taken out in Spain decreased by 5.5% in June compared to the same month in 2023, reaching 31,526 loans, according to data released by the National Institute of Statistics (INE). This decline follows a 18.2% drop in May. The average interest rate for home loans rose slightly to 3.26% in June, up from 3.25% in May. However, both figures represent the lowest rates since the beginning of 2024. The average loan amount increased by 1.9% year-on-year to €146,117, while the total amount lent decreased by 3.7% to €4.6 billion. The increase in interest rates reflects the European Central Bank’s (ECB) policy aimed at curbing inflation. This recent trend suggests that the Spanish housing market is starting to cool, with rising interest rates impacting borrower affordability and demand.