The current Spanish mortgage market

The Spanish mortgage market in 2025 offers very competitive rates for both residents and
foreign investors. But what factors can influence mortgage rates?
The following can determine the mortgage rates and conditions that Spanish banks might
offer you:

• Your existing relationship with the bank (if you have one) – An established positive relationship
with a particular lender may result in favourable rates.
• Loan-to-value ratio (LTV) – The percentage of a property’s value that a Spanish bank is willing to
lend you when you take out a mortgage. A lower LTV could mean lower interest rates.
• Debt-to-income ratios (DTI) – This metric compares your total monthly debt repayments to your
monthly gross income to determine whether you can afford to pay an additional debt.
• Employment stability, your salary and income sources – A stable job or source of income
signals to banks that you can be trusted to make your monthly repayments.
• Credit history – Spanish lenders may be reluctant to approve mortgage loan applications if you
have bad credit, particularly in the last 7 years.
• Your age – You can apply for a Spanish mortgage from 18 years of age and are expected to have
paid the full loan back before you’re 75, which can impact how long your loan term is.
•

You could potentially earn rate reductions from a specific bank if you switch your bank
account to them, insure your life, take out home insurance and fit an alarm system on the
property. Spanish mortgage brokers such as ourselves can also use our established
relationships with the banks to get you exclusive discounts and loan conditions.
What interest rates do Spanish banks offer?
Banks in Spain can offer buyers fixed or variable rate mortgages, but which is best for you?
Fixed rate mortgages
Fixed rate mortgages are a type of home loan where the interest rate stays the same
throughout the mortgage term.

• Spain’s residents and citizens enjoy mortgage rates from 2.5% to 3.9%.
• Non-residents tend to receive a slightly higher mortgage interest rate than residents, ranging
from 2.9% to 4.9%.

(Some Spanish lenders may offer lower fixed rates, although you’ll likely need to meet
specific criteria.)
The benefits of a fixed interest rate mortgage include stable monthly payments that make it
easier to budget and protection from rate increases. However, fixed mortgage rates are
usually higher than variable rates, and you could miss out on lower interest rates if the
market average falls.
Variable rate mortgage loans
Variable mortgages are another type of home loan where the interest rate may change over
time, usually once a year. In Spain, the rate is normally based on the bank’s margin plus
the Euribor rate. This is the interest determined by the European Central Bank, which
currently sits at 2.096%.

The terms in Spain for a variable rate mortgage loan could include an initial fixed rate period
before switching to a variable rate, but this depends on the lender.
The main advantage of a variable rate mortgage loan is that you’ll likely experience a lower
initial rate than you would with a fixed one. This means you could benefit from lower
payments if the Euribor drops, offering more flexibility when it comes to refinancing or
paying off your loan early.
On the other hand, this option tends to be high risk during unpredictable economic climates
– if the Euribor rises, your monthly payments will go up. Due to this uncertainty, it can be
difficult to budget long-term.
How to calculate the cost of your mortgage in Spain?
We have partnered up with a highly trusted mortgage broker called FluentFinanceAborad
to ensure our clients gets the best possible deal with a personal service.
Their Spanish mortgage calculator provides a simple and quick way to calculate the total
cost of your monthly mortgage payments.
All you have to do is enter the loan amount you need to borrow, the term over which you
intend to pay it off, and the interest rate. This will then tell you how much your mortgage
loan monthly payments will be – it’s as easy as that!