Will mortgage rates go down in 2023?

31 January, 2023 | Alba Tebar

Calm and deceleration are the two main words we could use to describe how real estate market will be this upcoming 2023. In general, what we will be facing is a slowdown in purchases and sales regarding housing. The same will happen to mortgage rates. It is estimated that 17% fewer mortgages will be signed, as a result of the inflationary trends that we have been experiencing this 2022.

In fact, housing prices will end this year 2022 with a rise of 4’5%, due to Ukraine war and traces of Covid-19 pandemic’s economy effects. In contrast, and as a way of balancing, housing prices will fall from 1% to 3%, depending on inflation, next 2023. That scenario, as whatever it may seem, is not a bad thing at all. Yes, there will be changes, but they won’t be as bad as it could have been. Or, at least, they won’t be extremely alarming.

Likewise, the Autonomous Communities in Spain with the highest number of mortgages constituted in august 2022 were the following ones:

  • Andalusia: 7620 new mortgages
  • Catalonia:6280 new mortgagees
  • Madrid: 6058 new mortgages

Probably, the biggest threats we will be facing are inflation, the eventual changes in ECB monetary policies, or even the upcoming new Housing Law. From now on, everything could happen and change, so it is important to stay informed and be aware of the updates.

In Hipotecasplus we are experts regarding real estate market, as we have been working in this field for many years. From our perspective, it is impossible to state anything at the 100% yet, but we know for sure that the tendency is going to be of moderation and restraint. Anyways, percentages will depend on each market and on each situation. Either way, remember that you can always ask us any questions you have related to that topic, and we will gently help you. No commitment is required, just call us and solve all your doubts!

Housing market

The thing is that, due to the rising prices tendency we have been experiencing during this year, people’s pockets will need to take a breath and won’t normally bet on big money disbursements. That is why the buys and sells are estimated to go down to -11%, which is about 50.000 purchases less.

The cause for that is the need for Spanish homes to delay their purchase decisions due to their progressive loss of purchasing power. However, in big cities with an active market, such as Madrid and Barcelona, less price swings are expected, as a result of the existing balance between supply and demand.

Mortgage prices

Just as we have previously mentioned, a fall of 17% in mortgages is expected for this 2023. This will result in, approximately, a fall of 360.000 compared to the previous year. Nevertheless, this decrease is not a bad thing, according to experts. That is because we come from a year in which the mortgage market as reached its top, achieving a new record.

From now on, costumers will be more cautelous, especially because of the climbing Euribor rates, since 2022 will close with an annual average of an increase of 4% in mortgages. That means that this 2022 there have been about 435.000 new mortgage loans. In that sense, if the control mechanisms by Europe had not been imposed to monitor inflation, the barrier of 460.000 new mortgages would have been reached this 2022, with more than 38.000 new ones per month.


As a result of the situation we have explained, bank entities will promote variable rate mortgages in 2023. Variable rate mortgages are the ones in which people are usually asked to pay lower taxes in comparison to fixed rate mortgages, and they are directly affected by Euribor.

Euribor is the reference indicator when talking about variable rates mortgages. It establishes if they are going to go up or down, depending on how it’s doing. In a word, if the Euribor rises, variable rate mortgages get more expensive, and vice versa. Indeed, it plays a big role in what you are going to pay regarding housing mortgage. That is why it’s interesting to keep updated with its “ups and downs”.

According to El Confidencial journal, Euribor will rise up to 3% in 2023. What’s more, there is no hope this will go down until 2025. To give you an idea of the current Euribor situation: this year 2022 started with a rate of -0’5% regarding Euribor, and now it’s almost at +2’6%. That is a big change in a very few time, due to Ukraine war and other related problems.

Anyways, panic is not an option. Banks are going to promote variable rate mortgages in order to prevent too many people from asking for the fixed-rate mortgages, and that is good news for you. Why? Because that means bank entities are going to offer advantageous options for customers who choose variable rates ones. For example, they can lower associated taxes and interests, among others.

Rental market

The interannual growth of rental prices will go from 5’8% in June 2022, to 8’4% in May 2023. That’s an increase of more than 2% for the next year.

Furthermore, a relevant fact that people will be facing is the lack of housing offer. This situation will push more people to do rent instead of purchasing a house.

Finally, it must be highlighted that is difficult to predict this kind of things. Because everything can just change so quickly, especially when we are talking about the economy, mortgages, and inflation. Anyways, remember that you can always come to Hipotecasplus and let you help and advice by our experts. We will always be delighted to help you with everything you may need! Do not hesitate to contact us!