A summary of the Spanish mortgage market data released in the first quarter of 2020 – interest rates, mortgage costs, and mortgage market lending volumes in Spain. Note these figures all related to the period before the coronavirus crisis changed everything.

12-month Euribor, the base rate used to calculate interest payments on most mortgages in Spain, ended the quarter on -0.266 as a monthly average in March compared to -0.109 the same month a year before, meaning it was almost one and a half times lower over 12 months (chart above).

As a result, borrowers in Spain with annually resetting Spanish mortgages based on Euribor would have seen their repayments fall by around €8 per month for a typical €120,000 loan with a 20 year term.

Spanish mortgage lending in Q1 2020

The number of new residential mortgages signed in February was down 0.6%, according to the latest provisional figures available from the Association of Spanish Notaries. The average new mortgage loan value was €140,110, up 5.5% year-on-year.

The chart below shows how new mortgage lending went from steady growth in the second half of last year, to zero or even negative growth in 2020, before the Covid-19 crisis was on the radar.

New mortgage lending is an important indicator of the health of the housing market, as it influences the amount of money available to home buyers. When new mortgage lending is growing, that helps boost the housing market. When lending contracts, demand for housing is restricted.

These figures are just more evidence that the Spanish property market was already struggling before Covid-19 closed it down.