Only 16,420 mortgages were taken out in February, 33 percent less than in the same month a year earlier, the figures from Spain's national statistics agency show.
That year-on-year drop is also larger than the 32.4 percent fall clocked up from January 2013 to 2014.
The average value of the mortgages signed in February 2014 was €102,4443 ($142,0009), or 1.1 percent lower than a year earlier the INE said.
Friday's news comes in the wake of a very poor showing for Spanish property sales in February.
Those sales were down 27.4 percent on a year, while sales of new homes plummeted 37.4 percent in the same period.
Sales to foreigners, meanwhile, are on the up. These hit a nine-year high in 2013 as non-Spaniards opened their wallets to the tune of €6.45 billion ($8.95 billion).
Brits snatched up 15 percent of those properties as foreign buyers jumped onto bargains in the Spanish housing market.