In May, the Balearic Islands’ mortgage market saw the sharpest decline in Spain in the number of residential mortgages signed. According to the latest data from the National Institute of Statistics (INE), 827 mortgage loans were signed, 19.6% fewer than in the same month of 2025—a decline far greater than that recorded nationwide, where activity fell by just 0.09%.
Although the decline remains significant, the pace of contraction slowed compared to the previous month, with a 4.36-point improvement in the year-over-year rate.
Consequently, the decline in activity was accompanied by a reduction in financing. Financial institutions granted 238.13 million euros for home purchases, down 18.8% from a year earlier and 5% less than in April, reflecting a slowdown in both the volume of transactions and the capital mobilized.
Looking at the real estate market as a whole, 1,178 mortgages were issued in the Balearic Islands for all types of properties, totaling 433.12 million euros. Of these, 1,105 were for urban properties—827 for residential homes, 263 for other types of real estate, and 15 for building lots—while the remaining 73 were for rural properties.
At the same time, refinancing activity remained limited. In May, there were only seven instances of creditor subrogation and fourteen changes in the loan holder. Of the 161 mortgages that had their terms modified, the vast majority (140) did so through novation—that is, by renegotiating the terms with the same financial institution.
Mortgage cancellations, meanwhile, far outnumbered new mortgage applications. A total of 1,211 mortgage loans were closed out, of which 804 were for residential properties—a figure that reflects a market where loan repayments continue to play a significant role.
The largest year-over-year decline among regions
Nationwide, the Balearic Islands were the autonomous community that recorded the largest year-over-year decline in the number of residential mortgages signed. Following the Balearic Islands were Cantabria (-17.9%) and Murcia (-13.3%).
At the other end of the spectrum, Navarre led the growth in the mortgage market with a 33.5% increase, followed by the Canary Islands (+16.5%) and Catalonia (+9.3%).
The trend in borrowed capital also varied across regions. The Canary Islands led the increase in the volume of financing, with growth of 46.3%, ahead of Navarre (+31.3%) and Catalonia (+21.9%). In contrast, the largest declines were recorded in Cantabria (-17.2%), Murcia (-6.3%), and Aragon (-6%).
