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Anyone hoping to buy a home in Spain may have noticed that getting a mortgage is becoming a rather different proposition, even though the banks are actually approving more housing loans than they were a year ago.

 

The number of mortgages taken out in Spain reached its highest level for a June in 16 years, with 129,240 loans recorded between April and June. The problem for many buyers is that they still need to find a huge deposit, while rapidly rising property prices mean that amount is getting harder to save.

 

Banks have traditionally used 80% of a property's value as a rough limit for mortgage lending. Some buyers have been able to borrow more than that in recent years, but the latest figures from the Bank of Spain show that high loan-to-value mortgages are becoming less and less common. They accounted for 9.6% of new mortgages in the second quarter, down from 11.6% a year earlier.

 

For foreign buyers living in Spain, the amount needed upfront can be particularly important to consider, since it’s often far more than they’re used to. The average mortgage has now reached a record €176,453, meaning buyers are taking on more debt simply because homes are becoming more expensive.

 

Property prices rose almost 9% in June, reaching an average of €2,114 per square metre. Murcia was among the areas seeing the biggest increases, with prices up 22.1%, while the Valencian Community recorded a 21% rise.

 

That combination of higher prices and the need for a sizeable deposit is already having an effect on the market. Home sales fell for the eighth consecutive month in June, dropping 4% compared with the same month last year.

 

Despite the eye-watering prices, the Bank of Spain doesn’t currently consider the situation to be another housing bubble like the one Spain experienced before the financial crisis. Instead, the main problem is that there simply aren’t enough homes available to meet demand.

 

That shortage is being made worse by several factors. According to a new report from BBVA Research, more than 80,000 planned homes across at least 12 provinces are being delayed because the electricity grid doesn’t have enough capacity to connect them, creating yet another obstacle to increasing supply.

 

For people already paying a mortgage, affordability is also worth watching. Mortgage payments were taking up 36.1% of household income in the first quarter of 2026, above the Bank of Spain's recommended 35% level.

 

 

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