In this financial context, and in order to isolate the effect of interest rates from other factors that influence consumption, we conducted an econometric analysis (using a technique known as «difference in differences») which estimates the causal impact of the rise and subsequent fall in interest rates on consumption. Consumption is defined as household expenditure carried out via card payments, direct debit charges and also cash withdrawals. This strategy compares the consumption pattern of households with variable-rate mortgages over the period analysed with that of a control group consisting of households with fixed-rate mortgages. The result reveals the change in consumption observed at any given time among households with variable-rate mortgages compared to a situation with no revision of their mortgage payments. Before the start of the rate hike cycle, the spending patterns of households with variable and fixed-rate mortgages were following a practically parallel pattern, reinforcing the validity of this approach.
The results show that in Q1 2024 – the period when monetary policy had the greatest impact on consumption in our analysis – the consumption of households with variable-rate mortgages was 2.7% lower than it would have been without the Euribor increases. This is a statistically significant effect, albeit one of a relatively moderate magnitude. The reduction in consumption was gradual: six months after the first revision of the mortgage payment, consumption had decreased by 1.2%; after 12 months, the decline reached 2.1%; and after 18 months, it stood at 2.5%.
The start of interest rate cuts in the summer of 2024 marks a turning point. After several quarters of reductions, the easing of the Euribor began to be reflected in mortgage payments and, subsequently, in consumption too. In Q4 2025, the expenditure of households with variable-rate mortgages increased by 1.8% compared to consumption prior to the initial rate cuts as a result of the reduction of their instalments – an effect that is also statistically significant. An illustrative way to interpret this figure is as follows: in Q4 2025, the median payment of households with variable-rate mortgages decreased by approximately 40 euros due to lower interest rates compared to before the initial rate cuts. The median consumption of these households increased by around 30 euros, meaning that they opted to consume three-quarters of the total reduction in their mortgage payment.
Although this may seem like a modest change at the individual level, its aggregate impact is significant. Given that households with variable-rate mortgages account for around 22% of aggregate private consumption in Spain, this increase observed throughout 2025 contributed to raising the aggregate growth in consumption by around 0.4 pps. In terms of GDP, the impact is approximately equivalent to 0.2 pps.
Finally, following the rise and subsequent fall in rates, the consumption of these households in December 2025 was only 1.0% below what it would have been in the absence of interest rate changes. This exercise, insofar as we know, constitutes the first analysis for Spain that combines a large sample of bank micro-data with advanced econometric techniques to causally estimate the transmission of monetary policy to household consumption. The DSTI allows us to measure the degree of financial stress; the evolution of mortgage instalments and income shows how changes in rates affect household budgets, and consumption reveals households’ final response.
Interest rates are not an abstract variable: they directly influence the spending decisions of millions of households. The results show that the monetary policy of the last cycle has clearly influenced household consumption in Spain, albeit with moderate intensity, and that interest rate cuts have had a tangible impact in boosting spending among households with variable-rate mortgages. Furthermore, having this unique sample and such a powerful econometric methodology will allow us to analyse how future shifts in monetary policy, such as might occur with the conflict in the Middle East, impact consumption.