The health of the mortgage market continues to improve step by step, at least regarding default rates. Mortgage delinquency closed the first quarter at 1.6%, a level not seen since the months leading up to the financial crisis. According to data from the Spanish Mortgage Association (AHE), this represents a two-decimal-point improvement compared to the final quarter of 2025, and a six-decimal-point drop compared to the same period last year. This translates to a 25% year-on-year decline in the delinquency rate.

“This is the lowest level since the period prior to the outbreak of the 2008 global crisis, when delinquency was practically nominal,” the association notes in its report.

This decline is driven by both a reduction in non-performing loan balances and an expansion of the outstanding balance. The total non-performing credit exposure to resident sectors continued its downward trajectory, also dropping by 0.6 percentage points to reach 2.6%.

Consumer Credit and Construction

On the other hand, consumer credit has followed the opposite path. Continuous increases in delinquency since late 2023 have pushed its default ratio to 4%. However, the association points out that this “remains at relatively stable levels and below those observed since 2008.”

There was also a decline in non-performing loan balances within the construction sector (excluding public works), which saw its volume decrease by 17% over the last year. In this segment, the non-performing loan rate dropped from the 8.4% recorded in the first quarter of 2025 to the current 7.1%. On a quarter-on-quarter basis, the ratio barely fell by a few hundredths of a percent; however, this trend is not due to an increase in defaults over the last three months, but rather to a contraction in the outstanding loan balance, which acts as the denominator of the ratio.

Productive Activities Show Strength

Meanwhile, credit to productive activities continued its clean-up process following a 13% decline, which pushed its delinquency rate down from 3.7% to 3.1%.

In short, the AHE concludes:

“From an annual perspective, all credit categories within this segment have shown favorable progress in both their non-performing balances and default ratios. In particular, the real estate sector enjoys a relatively solid level of solvency, having moved past the severe deterioration associated with the 2008 financial crisis.”