They kicked the Jews out unless they converted. Those that stayed and converted, if it was discovered by the Inquisition that they had continued “Judaizing” in secret, were burnt at the stake and all their property forfeit. Pretty bastardly all around. A rabbi who managed to leave Spain, became the head of the Moroccan Navy, and as such mostly practiced piracy against Spanish shipping.
Most stayed and converted. Indeed, most of the previous Jewish population, as much as 10% of that of the population of the Iberian peninsula, had converted in the previous two centuries.
In 1492 about 2/3 of the remaining Jews converted.
The Inquisition was aimed at, initially, not the conversos of 1492, but at those earlier ones and their descendants, ones much like Torquemada himself, who was descended from Jewish conversos grandparents. Torquemada, IIRC, was of pure Jewish stock.