Business · Markets · 5 hrs ago
Spanish banks raise mortgage costs as lending begins to slow
Spanish banks are raising mortgage costs as interest rates rise and the housing market begins to slow.
The changes affect borrowers across Spain, where housing demand remains high despite rising home prices and fewer home sales.
More than 500,000 mortgages are still expected this year, which would make it the second year in a row above that level.
But new mortgage signings fell in July by the most year on year in 25 months.
The average mortgage rate reached 3.01% by July, its first time above 3% in a year and a half.
In October, Bankinter, Sabadell and Kutxabank announced increases to some advertised mortgage rates, while lenders protect their margins against higher borrowing costs.
Banks are expected to lend more selectively, and markets expect the European Central Bank may raise rates by 0.25 percentage points in October or December.
Spanish banks have raised the advertised costs of some mortgages as interest-rate conditions change.
Bankinter increased rates across its mortgage types, while Banco Sabadell and Kutxabank also raised some rates.
The average mortgage interest rate reached 3.01% by July, its first time above 3% in a year and a half.
New mortgage signings in July recorded their steepest year-on-year fall in 25 months, according to Spain’s National Statistics Institute.
The Spanish Mortgage Association estimates that more than 500,000 mortgages will be signed this year, for the second consecutive year.
- Who
- Spanish banks, including Bankinter, Banco Sabadell and Kutxabank.
- What
- Banks have raised some mortgage costs as mortgage lending shows signs of slowing.
- When
- Banks made the reported rate increases in October 2026; July data showed a fall in new mortgage signings.
- Where
- Spain.
- Why
- Banks are adapting to changing interest-rate conditions and protecting their margins as the cost of money in the euro area rises.
This story does not have two clearly opposing sides.
New mortgage signings recorded their steepest year-on-year fall in 25 months, according to the latest figures cited.
Banks began another round of increases in advertised mortgage rates.
- Average mortgage rate by July
- 3.01%
- June average mortgage rate
- 2.96%
- Bankinter fixed mortgage, 25 years
- Increased from 3.81% to 4.12% TAE with maximum discounts
- Banco Sabadell fixed mortgage
- Increased from 3.58% to 3.67%
- Kutxabank variable mortgage initial rate
- Increased from 2.07% to 2.27% for the first year
- Mortgage signings expected in 2026
- More than 500,000, according to the Spanish Mortgage Association