This is the highest increase in three years and has not been recorded in more than 14 years. The average interest rate (3.12%) reached its lowest level since April 2023.

In October, home mortgages increased by 60.8% compared to the same month last year, reaching 51,535 loans. This is the highest growth since September 2021 and the highest number of transactions since September 2010.

According to information released this Friday by the National Statistics Institute (INE), there have been four consecutive months of increases, in line with the increase in home sales and purchases.

Development of mortgage contracts in Spain.

The average interest rate stood at 3.12%, slightly below September’s 3.14%, reaching its lowest level since April 2023, when it was 3.08%. A year ago, it stood at 3.31%. Despite this, it has now been above 3% for 18 consecutive months.

In October, 37.4% of home mortgages were signed at a variable rate, with an initial rate of 2.83%, while 62.6% were at a fixed rate, the highest percentage since March 2023, with an average initial rate of 3.32%. According to Statistics data, the average amount of these loans increased by 7.3% in year-on-year comparison in the tenth month of the year, reaching 150,556 euros.

On a month-on-month basis (October over September), residential mortgages grew by 24.8%. In the first ten months of the year, the number of home purchase mortgages, the capital loaned and the average amount increased by 9.2%, 11.2% and 1.8%, respectively.

The boom in mortgages… and the pressure on supply Juan Villén, general manager of idealista/mortgages, points out that the data reflect a high qualified demand for housing “despite the constant increase in prices”, which raises doubts about how sales and mortgages will behave in a context where supply is increasingly limited.

For her part, María Matos, Director of Studies at Fotocasa, points out that the market is experiencing a change in the profile of buyers, especially among those who could not access the purchase due to high financing costs. This suggests that the pressure between lack of stock and demand will increase in the future. According to Fotocasa Research, although 19% of buyers have suspended their purchase process and 21% expect further rate cuts, the more favorable conditions now offered by banks could reduce, in the coming months, the percentage of buyers who choose not to apply for a mortgage, currently at 35%.

These data are set against the backdrop of a change in the mortgage cycle. Matos points out that “mortgages are leaving behind the restrictive period and starting their own boom” and believes that “the fourth quarter of the year will reflect this dynamism in home purchases, driven by the optimism and confidence of buyers in the mortgage market”.