Mortgage interest rate in Spain Q4 2014- Q3 2021
It can be seen that the mortgage interest rate in Spain decreased overall during the period under observation, reaching a value of 1.47 percent as of the third quarter of 2021. The largest mortgage interest rate during this period was found in the fourth quarter of 2014, when a mortgage interest rate of 2.72 percent was recorded. Spain had a considerably higher mortgage interest rate than other Southern European countries such as Italy and Portugal, being closer to that of the UK and the Netherlands.
The aftermath of the property bubble
Before the bursting of the real estate bubble, the housing market experienced a period of intense activity. A context marked by economic growth, high employment rate, low interest rates, skyrocketing house prices and land speculation, among others, encourage massive lending for the acquisition of property; in 2005 alone, more than 1.3 million home mortgages were granted in Spain. When the bubble burst and the financial crisis hit the country, residential real estate transactions plummeted and households’ non-performing loans jumped to nearly 50 billion euros as countless families were not able to cope with their debts. Over a decade after the onset of the crisis, and despite falling mortgage rates, the volume of mortgage loans keeps decreasing every year.
A homeowner country
Traditionally, Spain has been a country of homeowners; as of 2019, the home ownership rate was roughly 76 percent. While nearly half of Spanish households own their property with no outstanding payment, the percentage of households that have loan or mortgage pending has been decreasing in recent years. Despite ownserhip remaining as the preferred tenure option, cultural changes, job insecurity and mounting house prices are prompting Spaniards to opt more and more to become tenants instead of owners, as shown in the changing dynamics of the Spanish residential rental market.
The aftermath of the property bubble
Before the bursting of the real estate bubble, the housing market experienced a period of intense activity. A context marked by economic growth, high employment rate, low interest rates, skyrocketing house prices and land speculation, among others, encourage massive lending for the acquisition of property; in 2005 alone, more than 1.3 million home mortgages were granted in Spain. When the bubble burst and the financial crisis hit the country, residential real estate transactions plummeted and households’ non-performing loans jumped to nearly 50 billion euros as countless families were not able to cope with their debts. Over a decade after the onset of the crisis, and despite falling mortgage rates, the volume of mortgage loans keeps decreasing every year.
A homeowner country
Traditionally, Spain has been a country of homeowners; as of 2019, the home ownership rate was roughly 76 percent. While nearly half of Spanish households own their property with no outstanding payment, the percentage of households that have loan or mortgage pending has been decreasing in recent years. Despite ownserhip remaining as the preferred tenure option, cultural changes, job insecurity and mounting house prices are prompting Spaniards to opt more and more to become tenants instead of owners, as shown in the changing dynamics of the Spanish residential rental market.
