How to compare mortgage offers in Spain

How to compare mortgage offers in Spain

To properly compare mortgages in Spain, you’ll need to look beyond the interest rate alone. Focus on the total cost of the loan over time and make sure the conditions align with your financial circumstances.

Key factors when comparing mortgages

• APR (TAE – Tasa Anual Equivalente): The real cost of the loan, including interest, fees, and mandatory charges.

• NIR (TIN – Tipo de Interés Nominal): The basic interest rate, excluding extras. Not sufficient on its own to compare deals.

• Fees: Opening fees, early repayment, subrogation or cancellation. Some may be waived or reduced.

• Linked products: Many banks require you to take out insurance, cards, or direct debit your salary to qualify for lower rates.

• Flexibility: Check for penalty-free early repayments or the ability to adjust the loan term.

Use comparison tools like those from the Bank of Spain, Idealista, Kelisto or the OCU. Always read the pre-contractual information sheet (FIPRE) before signing. If in doubt, consult a financial advisor.

Tips for negotiating better conditions

If you have a permanent job, stable income, and healthy savings, you can negotiate better spreads or eliminate certain fees. Compare at least three banks, use competing offers, and ask about ongoing promotions. Banks appreciate solvent clients and long-term relationships.

Some lenders offer better terms if you bundle services, such as insurance or payroll deposits. Explore options for young buyers, large families or subsidised housing schemes.

Understanding the types of mortgages in Spain

Understanding the types of mortgages in Spain

In Spain, mortgages are the most common method of financing home purchases. Most banks offer products tailored to different profiles: salaried workers, self-employed individuals, young buyers, residents and non-residents. Mortgages typically last 20 to 30 years and can be either Euribor-linked variable rates or fixed interest rate loans.

Main types of mortgages in Spain

• Fixed-rate mortgage: Monthly repayments remain constant throughout the loan term. Ideal for those seeking stability and predictability.

• Variable-rate mortgage: Indexed to the Euribor plus a spread. Often starts with lower payments, but comes with interest rate risk.

• Mixed-rate mortgage: Fixed rate for the first few years, then switches to variable. Offers both security and flexibility.

• Youth mortgage: Some banks offer special conditions for under-35s, such as longer terms or reduced interest rates.

• Mortgages with public support: Certain regional or municipal programmes offer financial aid or guarantees to help buyers access the housing market.

Fixed-rate mortgages have grown in popularity due to low Euribor levels. Variable options may be cheaper initially but require risk tolerance. Mixed mortgages are a well-balanced alternative. If you're buying from abroad, be sure to check specific conditions for non-residents.

Basic conditions for getting a mortgage

You'll typically need to contribute 20%–30% of the property’s value as a deposit. Lenders require proof of financial solvency, stable employment, a good credit history, and a property free of encumbrances. You’ll also need to cover valuation, notary, registry, and tax costs (AJD, ITP or VAT, depending on the case).