The average mortgage interest rate in Spain followed a downward trend for almost a decade before increasing dramatically in 2022. In 2023, new housing loans had an average interest rate of 3.74 percent - about three times the interest rate in 2020. Mortgages with a five to 10-year term were the only product which saw rates decline between 2022 and 2023. Why did mortgage rates spike? Macroeconomic factors, such as inflation, economic growth, and fiscal policy, play a major role in determining the cost of a loan. Inflation in Europe started rising in late 2021, largely due to surging energy costs. In Spain, the annual change of the consumer price index peaked at almost 11 percent in July 2023. The European Central Bank has responded by introducing a series of hikes on the key interest rates (main refinancing operations, marginal lending facility, and deposit facility), which have affected lending rates across the European Union. How has the housing market reacted to the interest rate hike? The housing market follows a certain seasonality, with more home sales in the second and fourth quarters of the year. This was also the case in 2022, but the last quarter of the year saw an annual decline. Though compared to previous years, the number of transactions was one of the highest, the annual decrease shows a potential downturn.

Mortgage interest rates in Spain soared in 2022, after falling below 1.5 percent at the end of 2021. In the second quarter of 2024, the average weighted interest rate stood at 3.46 percent. That was lower than the rate in the same period the previous year. Despite the increase, Spain had a considerably lower mortgage interest rate than many other European countries.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; in 2021, the homeownership 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 ownership 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 annual average interest rate on new residential loans in Spain continued to rise in 2023, after increasing in for the first time in 2022 following a decade long period of year-on-year decrease. In 2023, the average mortgage rate was 3.75 percent, up from 1.49 percent in 2021.

Key information about Spain Long Term Interest Rate

• Spain Long Term Interest Rate: Month Avg: Spain: ECB Harmonised was reported at 3.10 % pa in Feb 2025, compared with 3.17 % pa in the previous month.
• Spain Long Term Interest Rate data is updated monthly, available from Nov 1991 to Feb 2025.
• The data reached an all-time high of 13.00 % pa in Oct 1992 and a record low of 0.04 % pa in Dec 2020.
• Long Term Interest Rate is reported by reported by CEIC Data.

The European Central Bank provides monthly Harmonised Long Term Interest Rate. The data reflects primary market yields.


Related information about Spain Long Term Interest Rate

• In the latest reports, Spain Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• The cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 2.90 % pa in Feb 2025.
• Spain Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.

Mortgage interest rates in Europe soared in 2022 and remained elevated in 2023. In many countries, this resulted in interest rates more than doubling. In Denmark, the average mortgage interest rate rose from 0.67 percent in 2021 to 4.98 percent in 2023. Why did mortgage interest rates increase? Mortgage rates have risen as a result of the European Central Bank (ECB) interest rate increase. The ECB increased its interest rates to tackle inflation. As inflation calms, the ECB is expected to cut rates, which will allow mortgage lenders to reduce mortgage interest rates. What is the impact of interest rates on homebuying? Lower interest rates make taking out a housing loan more affordable, and thus, encourage homebuying. That can be seen in many countries across Europe: In France, the number of residential properties sold rose in the years leading up to 2021, and fell as interest rates increased. The number of houses sold in the UK followed a similar trend.

The average mortgage interest rate decreased in nearly every country in Europe between 2012 and 2021, followed by an increase in response to inflation. In Hungary, Poland, Czechia, and Romania, mortgage rates peaked in late 2022 and the beginning of 2023, followed by a gradual decline until the first quarter of 2024. The rest of the countries under observation, including the biggest mortgage markets - the UK and Germany, saw a continued increase in interest rates until the fourth quarter of 2023. In the first quarter of 2024, mortgage interest rates declined quarter-on-quarter across almost all markets in focus, marking a long awaited easing of monetary policy.

This dataset provides values for INTEREST RATE reported in several countries. The data includes current values, previous releases, historical highs and record lows, release frequency, reported unit and currency.

Mortgage rates in the Netherlands increased sharply in 2022 and 2023, after declining gradually between 2008 and 2021. In December 2022, the average interest rate for new mortgage loans stood at 1.65 percent, and by the end of 2023, it had risen to 4.13 percent. The 10-year interest rate was the lowest, at 2.96 percent; the floating and less than one-year interest rates amounted to 5.13 and 4.62 percent, respectively. In early 2024, mortgage rates decreased notably. Are mortgage rates in the Netherlands different from those in other European countries? When comparing this ranking to data that covers multiple European countries, the Netherlands’ mortgage rate was similar to the rates found in Spain, the United Kingdom, and Sweden. It was, however, a lot lower than the rates in Eastern Europe. Hungary and Romania, for example, had some of the highest mortgage rates. For more information on the European mortgage market and how much the countries differ from each other, please visit this dedicated research page. How big is the mortgage market in the Netherlands? The Netherlands has overall seen an increase in the number of mortgage loans sold and is regarded as one of the countries with the highest mortgage debt in Europe. The reason behind this is that Dutch homeowners were able to for many years to deduct interest paid from pre-tax income (a system known in the Netherlands as hypotheekrenteaftrek). Total mortgage debt of Dutch households has been increasing year-on-year since 2013.

In 2023, the average mortgage rates in European countries varied from 2.6 percent in Bulgaria to over eight percent in Hungary. The mortgage rate for a home purchase is decided depending on the individual situation of the homebuyer, their credit history, and income, but they also follow macro determinants including the base lending rate, inflation, economic growth, and the health of the housing market. Starts, completions and prices The supply of new housing varies in different countries in Europe. In 2023, the number of new housing units completed per 1,000 citizens was between 0.8 and seven, with this number varying greatly in different countries. Ireland and Poland were among the countries with most completed housing units. When it comes to housing starts, Ireland tops the ranking. The average transaction price of a new dwelling in 2023 ranged anywhere from roughly 1,300 euros per square meter to under 5,000 euros per square meter. Housing stock As the most populous country in Europe, Germany has the largest housing stock. Comparing the number of housing units per 1,000 citizens is an easy way to identify housing shortages. In Greece and the UK, for example, the number of dwellings per 1,000 citizens measured less than 400, compared to Bulgaria and Spain, where it was around 600.

The mortgage prevalence among homeowners in Europe varied widely across different countries in 2023. About 79 percent of the total population in Norway was a homeowner, with 60 percent paying out a mortgage loan. Conversely, only one percent of households in Romania had a mortgage, with nearly 96 percent being homeowners. Meanwhile, an average of 25 percent of the total population within the EU-27 was an owner-occupant with a mortgage or housing loan. Homeownership depends on multiple factors, such as housing policy, the macroeconomic situation, the state of the housing sector, and the availability of finance. Countries with more developed mortgage markets tend to have lower mortgage interest rates.

Key information about Spain Non Performing Loans Ratio

• Spain Non Performing Loans Ratio stood at 3.3 % in Dec 2024, compared with the ratio of 3.4 % in the previous month
• Spain Non Performing Loans Ratio data is updated monthly, available from Jan 1962 to Dec 2024
• The data reached an all-time high of 13.6 % in Dec 2013 and a record low of 0.3 % in Oct 1962

CEIC calculates Non Performing Loans Ratio from monthly Credit Institutions Delinquent Accounts and Total Loans. Banco de España provides Credit Institutions Delinquent Accounts and Total Loans in EUR. Banco de España defines Delinquent Accounts as loans in relation to which there is a reasonable doubt regarding full repayment of principal or interest. Non Performing Loans covers Domestic loans only. Credit Institutions Loans exclude loans to credit institutions and general government.


Further information about Spain Non Performing Loans Ratio

• In the latest reports, Money Supply M2 in Spain increased 5.2 % YoY in Jan 2025
• Spain Foreign Exchange Reserves was measured at 61.4 USD bn in Jan 2025
• The Foreign Exchange Reserves equaled 1.6 Months of Import in Nov 2024
• The country's Domestic Credit reached 2,238.5 USD bn in Nov 2024, representing an drop of 0.4 % YoY
• Household Debt of Spain reached 808.2 USD bn in Jun 2024, accounting for 48.9 % of the country's Nominal GDP

The United Kingdom, Germany, and France were the countries with the largest mortgage markets in Europe in 2024, when considering the value of loans outstanding. In the second quarter of the year, the UK had more than 1.9 billion euros worth of mortgages outstanding. Other countries with large mortgage markets included the Netherlands, Spain, Sweden, and Italy - all exceeding 400 billion euros. One of the main drivers of mortgage activity is the cost of borrowing. In 2022, interest rates increased dramatically across Europe. Ireland, and Germany remained among the few countries with an average interest rate under four percent.

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Digital Lending Market Size 2024-2028

The digital lending market size is forecast to increase by USD 34.56 billion at a CAGR of 26.63% between 2023 and 2028.

The market is experiencing significant growth due to the adoption of advanced technologies and cloud-based solutions. The use of artificial intelligence, machine learning, and blockchain technology In the lending process enhances efficiency, reduces processing time, and improves accuracy. Additionally, the rise In the adoption of cloud-based digital lending servicing software offerings enables lenders to offer flexible and convenient loan options to borrowers.
However, the market faces challenges related to compliance and regulatory requirements. Lenders must adhere to stringent regulations and ensure data security and privacy, which can be complex and costly to implement. These factors are shaping the digital lending landscape and driving innovation In the industry.

What will be the Size of the Digital Lending Market During the Forecast Period?

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The market encompasses the provision of loans and credit facilities through electronic channels, including digital platforms, mobile devices, and online banking. This market has experienced significant growth due to the increasing adoption of technology in financial services. Financial institutions leverage technology, such as data analytics, artificial intelligence, and machine learning, to assess creditworthiness and streamline loan applications and disbursement processes. Digital lending caters to various loan types, including personal, business, and student loans. The convenience and accessibility offered by digital lending have led to a surge in loan applications, with smartphones and mobile devices playing a pivotal role in mobile payments and mobile banking.
However, cybersecurity remains a critical concern, with potential risks from cyberattacks and data breaches threatening the security of personal information. Regulations continue to evolve in response to these challenges, while digitalization and improved customer experience are key drivers of market growth. Despite these opportunities, interest rates and the potential for data breaches or cyberattacks remain significant challenges.

How is this Digital Lending Industry segmented and which is the largest segment?

The digital lending industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

Component

  Solution
  Service


Deployment

  On-premises
  Cloud


End-User

  Banks
  Credit Unions
  NBFCs


Geography

  North America

    Canada
    US


  APAC

    China
    India
    Japan


  Europe

    Germany
    France
    Spain


  South America



  Middle East and Africa

By Component Insights

The solution segment is estimated to witness significant growth during the forecast period.

The market experienced significant growth in 2023, with the solution segment leading the way due to the adoption of advanced technologies. Digital lenders, including Fiserv, Intercontinental Exchange Inc., and Fidelity National Information Services, provide faster and more convenient loan processing, catering to borrowers' increasing demand for quick access to funds. The market's expansion is further driven by the influx of fintech startups and traditional financial institutions entering the digital lending space. Innovative solutions, such as personal and business loans, student loans, and mobile payments, are meeting the evolving requirements of borrowers and lenders.

Technology advancements, including data analytics, artificial intelligence, machine learning, blockchain, and cybersecurity, are enhancing the digital lending experience. Despite challenges such as cyberattacks, data breaches, and regulatory requirements, the market continues to grow, with increasing usage of smartphones, mobile devices, and online banking driving the demand for digital lending services.

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The Solution segment was valued at USD 4.53 billion billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 46% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market in North America is experiencing significant growth due to the region's technological advancements and the increasing adoption of digital solutions by financial institutions. The use of technologies such as artificial

The value of residential mortgage lending decreased across many European countries in the first quarter of 2024. In the UK, new lending declined from about 66.8 billion euros to 59 billion euros between the first quarters of 2023 and 2024. One of the main reasons was the worsening economic conditions and rising interest rates. Together with France and Germany, the UK make up the top three biggest markets, both in terms of gross mortgage lending and outstanding mortgage lending.

In the presented European countries, the homeownership rate extended from 42 percent in Switzerland to as much as 96 percent in Albania. Countries with more mature rental markets, such as France, Germany, the UK and Switzerland, tended to have a lower homeownership rate compared to the frontier countries, such as Lithuania or Slovakia. The share of house owners among the population of all 27 European countries has remained relatively stable over the past few years. Average cost of housing Countries with lower homeownership rates tend to have higher house prices. In 2023, the average transaction price for a house was notably higher in Western and Northern Europe than in Eastern and Southern Europe. In Austria - one of the most expensive European countries to buy a new dwelling in - the average price was three times higher than in Greece. Looking at house price growth, however, the most expensive markets recorded slower house price growth compared to the mid-priced markets. Housing supply With population numbers rising across Europe, the need for affordable housing continues. In 2023, European countries completed between one and six housing units per 1,000 citizens, with Ireland, Poland, and Denmark responsible heading the ranking. One of the major challenges for supplying the market with more affordable homes is the rising construction costs. In 2021 and 2022, housing construction costs escalated dramatically due to soaring inflation, which has had a significant effect on new supply.

House prices in the UK rose dramatically during the coronavirus pandemic, with growth slowing down in 2022 and turning negative in 2023. The year-on-year annual house price change peaked at 14 percent in July 2022. In June 2024, house prices increased by 2.7 percent. According to the Nationwide Building Society, the average house price exceeded 265,000 British pounds in 2022. Correction in housing prices: a European phenomenon The trend of a growing residential real estate market was not exclusive to the UK during the pandemic. Likewise, many European countries experienced falling prices in 2023. When comparing residential property RHPI (price index in real terms, e.g. corrected for inflation), countries such as Germany, France, Italy, and Spain also saw prices decline. Sweden, one of the countries with the fastest growing residential markets, saw one of the largest declines in prices. How has demand for UK housing changed since the outbreak of the coronavirus? The easing of the lockdown was followed by a dramatic increase in home sales. In November 2020, the number of mortgage approvals reached an all-time high of over 107,000. One of the reasons for the housing boom were the low mortgage rates, allowing home buyers to take out a loan with an interest rate as low as 2.5 percent. That changed as the Bank of England started to raise the base lending rate, resulting in higher borrowing costs and a decline in homebuyer sentiment.