## The Case for Borrower-Based Macroprudential Measures in Spain

_Selected Issues Papers, June 29, 2026_

## Source details

**Canonical URL:** [The Case for Borrower-Based Macroprudential Measures in Spain](https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/26/the-case-for-borrower-based-macroprudential-measures-in-spai-577339)

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## Bibliographic details
- Authors: Nina Biljanovska, Laura Valderrama
- Published: June 29, 2026
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229051712.018

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### Summary
- House prices in Spain have risen rapidly since the pandemic, and the share of riskier mortgages at issuance has increased, suggesting a potential buildup of mortgage-related vulnerabilities.
- The paper provides analytical inputs to inform the potential design and calibration of borrower-based measures (BBMs), currently not activated in Spain.
- It reviews international experience with BBMs and uses Spanish loan-level data and scenario-based stress tests to assess alternative calibrations.
- Results suggest that loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses, with additional gains from income-based caps.
- BBMs would complement capital buffers by addressing risks at origination.

### Data and Methods
- Review of international experience with borrower-based measures (BBMs).
- Empirical analysis using Spanish loan-level data.
- Scenario-based stress tests to assess alternative BBM calibrations.

### Key Findings
- Loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses.
- Income-based caps provide additional gains when combined with loan-to-value limits.
- The share of riskier mortgages at issuance has increased since the pandemic, contributing to potential mortgage-related vulnerabilities.
- BBMs address origination-stage risks and therefore complement capital buffers.

### Policy Implications and Recommendations
- Consider activation and careful calibration of borrower-based measures (BBMs) in Spain to mitigate a potential buildup of mortgage-related vulnerabilities.
- Prioritize loan-to-value caps as they yield the largest reduction in default risk and mortgage portfolio losses.
- Use income-based caps alongside loan-to-value caps to obtain additional risk-reduction benefits.
- Employ BBMs to complement existing capital buffers, targeting risks at origination rather than through capital alone.

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/26/the-case-for-borrower-based-macroprudential-measures-in-spai-577339_