The banking supervisor is considering excluding vulnerable groups, such as young people, from new mortgage limitations to prevent the tightening of credit from hindering their ability to buy a home.
The Bank of Spain is finalising a modification of mortgage regulations that will allow for more flexible lending conditions for home purchases, especially for young people. The measure aims to prevent the restrictions approved to ensure financial stability from excluding those who have more difficulties in accessing a mortgage.
According to sources from the supervisor, the new regulatory framework could be ready after the summer and will establish exceptions for certain buyer profiles, such as those under 35 years old or those purchasing their first primary residence. The initiative responds to the growing concern over late emancipation, which now averages over 30 years, and the low salaries of young people, which barely reach 1,372 euros gross per month.
The New Rules: More Flexibility for First-Time Buyers
Currently, financial institutions grant mortgages for a maximum of 80% of the appraised value, with payments not exceeding one-third of the applicant's income and terms limited until retirement age. The Bank of Spain is considering tightening these criteria to reinforce the stability of the system, but at the same time is proposing to exclude the most vulnerable groups from these restrictions.
The supervisor's proposal, led by José Luis Escrivá, contemplates that young people and first-time homebuyers can access more favourable conditions, such as a higher percentage of financing or longer terms. The idea is that they should not be subject to the same limits as investors or those purchasing second homes.
"The goal is to prevent financial prudence measures from having unintended effects on the household economy of the most vulnerable families," sources from the Bank of Spain have stated. The entity seeks a balance between system stability and the need not to close the door on those wanting to buy their first home.
Market Impact: Falling Prices, Rising Rents
Tighter mortgage restrictions could reduce housing demand, which in turn would contain or even lower prices. However, this effect would have a negative side: the increase in rental prices, as many people would opt for this option if they cannot access a mortgage. The homeownership rate in Spain has already fallen to 72%, and these measures could accelerate that decline.
Experts like Mariano Lasarte from KPMG warn that excessive tightening could hinder investor purchases, leading to an initial slowdown in sales and a gradual decline in prices in the coming years. Meanwhile, Ricard Garriga, co-founder of Trioteca, points out that the Spanish mortgage market is currently competitive, with average interest rates below 3%. An increase of one percentage point in interest would mean a significant rise in monthly payments, complicating the purchase even further.
"A too-rigid mortgage market would close doors to those who most need to buy a home, while lax regulations could generate financial risks," sector sources indicate.
Timeline and Key Points for Buyers
The new regulatory framework could be ready after the summer and will serve as a reference for banks when granting mortgages. However, it will not be applied immediately, as the current financial context is stable and does not allow for excessive risk. The Bank of Spain has ruled out reauthorising 100% mortgages or allowing debt levels that would increase delinquency.
For young people considering buying a home, the recommendation is to stay alert to these developments, as they could facilitate access to credit. In the meantime, it is advisable to save for a deposit and maintain stable income, as banks will continue to require solvency. The timeline for the new rules to come into effect has not yet been set, but it is expected that the supervisor will publish the final draft before the end of the year.
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