Spain’s mortgage non-performing loan (NPL) ratio stood at 1.85% at the end of the third quarter of 2025, its lowest level since December 2008, according to data from the Bank of Spain.

The figure comes from the latest arrears bulletin published by the Spanish Mortgage Association (AHE), based on central bank data. The mortgage NPL ratio declined due both to a reduction in the volume of non-performing mortgage loans and an increase in the overall stock of mortgages.

Specifically, the volume of non-performing mortgage loans fell by 20.9% year on year to €9.14 billion, while declining by 7.9% on a quarterly basis.

Total outstanding mortgage lending reached €491.87 billion in the third quarter, up 0.8% compared with the previous quarter and 3% higher than in the same period of 2024.

Meanwhile, the loan portfolio for home renovation also showed a favourable trend in asset quality. Its NPL ratio improved by 0.6 percentage points year on year to 3%, although it remained unchanged from the second quarter.

In the corporate segment, the NPL ratio for loans to the construction sector stood at 7.2%, slightly higher than in the second quarter but below the 8% recorded at the end of the third quarter of 2024.

Finally, the real estate activities portfolio closed September with an NPL ratio of 1.8%, down from 1.9% in the previous quarter and 2.5% in the third quarter of the previous year.

Original Story: Idealista | Author: Europa Press
Edition and translation: Prime Yield
Image by Jörg Hertle from Pixabay