Mortgages sank another 22.3% in October with interest at 2015 highs

The effects of the increase in interest rates with which the European Central Bank (ECB) has tried to put a stop to the inflation crisis are increasingly visible in the Spanish real estate market. The mortgage firm sank another 22.3% year-on-year in October, its ninth consecutive month of decline, after the average interest rate on home loans hit its highest level since 2015 at 3.32%. The higher cost affected both fixed-rate and variable-rate mortgages, which are mostly referenced to the Euribor. The indicator has, however, been registering strong declines for several weeks, the effect of which should begin to be noticed next June.

The decline in the granting of mortgages is less pronounced than in September, when these loans plummeted by more than 29%. On average, signed mortgages saw their import reduced by 5.3% compared to the same month of the previous year to 140,564 euros. In total, the capital lent by all financial entities decreased by 26.4%, to 4,487 million.

Between October of last year and October of this year, the average interest rate on housing loans has increased by 1.18 points and it has now been seven consecutive months in which it is also above 3%.