After two years of eye-watering interest rates, 2024 promises to bring some relief for mortgage holders in Spain.

For homeowners, the last couple of years have been marked by sharp rises in interest rates by central banks. This was something felt not only in Spain but across the continent and led the Euribor rate to skyrocket and variable-rate mortgages to become much more expensive.

This had a two-fold effect on the Spanish property market: firstly, it made mortgage payments for millions of Spaniards more expensive, and secondly, the high rates put off many people who wanted to get on the property ladder but couldn’t, which in turn pushed them into the already overly saturated rental market that is also seeing significant price rises.

The average interest rate on mortgages at the end of 2023 rose to almost one and a half percent higher than at the end of the previous year. As such, made the conditions for signing new mortgage loans hardened, and mixed mortgages skyrocketed to the detriment of fixed and variable loans.

As a result, 2023 saw a real slowdown in the Spanish mortgage market. Until October, the last month of available data from Spain’s National Institute of Statistics (INE), 323,988 mortgages were signed. In the same period in 2022, the figure was 393,730, a 17.7% drop. Clearly, people were put off by the rate hikes.

Fortunately, 2024 seems set to continue encouraging trends seen in November and December 2023: namely a rate freeze and further possible falls in the Euribor.

In December 2023, the Euribor registered the largest drop since 2009, falling back below the 4% threshold to 3.68%. Estimates by experts for 2024 point to an easing of the crucial Euribor rate, the interest rate most often used to work out mortgage payments in Spain and to calculate both variable and fixed rates.

So, what does this all mean for the Spanish mortgage market in 2024?

Well, looking at the trends to end 2023, things seem cautiously optimistic. The Euribor had two consecutive slowdowns and has stopped rising, which moderated the mortgage market after the volatility of previous years and many banks have already begun to lower the interest on their fixed rates.

All in all, despite the uncertainty it seems safe to say that overall trends to end 2023 suggest that in 2024 it will be possible to find mortgages that are somewhat cheaper than those offered for much of last year.

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