La banca firmará un récord de 500.000 hipotecas por segundo año consecutivo

The Spanish banking sector is set to issue a record 500,000 mortgages this year for the second consecutive year, according to recent reports. This figure surpasses the peak of the housing bubble era almost two decades ago when over a million loans were granted. Financial experts believe that the market will begin to deflate noticeably in 2027 due to rising interest rates.

The surge in home prices in Spain continues to shrink the number of fortunate individuals able to enter the housing market. Some potential buyers can no longer afford what sellers are asking. However, the Spanish Association of Mortgage Lenders (AHE) is confident that this year, just like last year, will end with 500,000 mortgages signed, the highest in almost two decades.

The shift in trend will come in 2027 due to the upward movement of interest rates in Europe. Some bankers think they could reach 4%. In the first seven months of the year, the number of home purchase loans reached 303,000 operations, a 5.4% increase compared to the same period last year. On average, 43,000 mortgages are being subscribed each month.

Year on year, the sharp rise in home prices has caused a 17,000 euro increase in the average mortgage. While previously a buyer would ask the bank 163,700 euros on average to sign the sale of his future home, the current median amount is 180,785 euros. The Bank of Spain assures there is no bubble risk because the banking sector has not relaxed lending criteria as it did before the financial crisis and because the level of household debt is not concerning.

According to their data, home prices are in real terms (inflation adjusted) 18% below those seen in 2007, when over a million mortgages were signed. At that time, the country lived a speculative spiral fueled by cheap money and a huge liquidity in the system. Now, the problem is only one but enormous: the lack of supply. The country counts 50 million inhabitants and needs one million more homes than there are.

Only 15% of the loans granted finance more than 80% of the assessed value of the property, far from the highest levels reached during the peak of the credit boom, assures the Bank of Spain. In the case of the six listed banks, this portfolio reaches 32,000 million euros. The mortgage business is not particularly profitable for the banking sector, but it carries a high contracted subsidized insurance and investment funds because subscribing these products benefits the loan.

Last year, well-paid Spaniards could opt for loans at 2% TAE fixed rate, a price much below the advertised one if they knew how to negotiate. Currently, this is not the case, but offers at 2.75%-2.80% can be found, according to financial sources. Spain has the cheapest mortgages in Europe, only behind Malta and Bulgaria, according to the European Central Bank (ECB).

Spanish mortgages are the cheapest in Europe, only behind Malta and Bulgaria, according to the European Central Bank (ECB).