Buy A House In Malaga - Expat Houses

Mortgage In Spain Online Calculator

Calculate how much you would pay for a mortgage in Spain

The last average rate of interest of a mortgages in Spain registered by the Bank of Spain reaches 1.72% (data from April 2020).

The interest rate that the banks that operate in Spain apply to their mortgage loans is currently very competitive and, in addition, with a downward trend.
But what is the reason for this reduction? Despite the regulatory changes introduced by the new mortgage law, the prices of new operations have fallen due to the fall in the Euribor. Thus, we can still get a very cheap and very low interest mortgage: variable rates of less than Euribor plus 1% or fixed interest of less than 2% at 30 years.

As we said, the current interest on mortgages is very low. And it is necessary to remember that we come from two price wars; one in the fixed rate sector and the other in the variable rate sector. Below we show a summary chronology of the most outstanding milestones of recent years.

Years 2015 and 2016: price war on fixed mortgages. Spanish financial institutions begin to offer products with interest from 2% to 20 years or even from 1.50% for shorter terms.

Year 2017: stagnation of interest. Banks slow that general decline and keep fixed rates to a minimum, while choosing not to touch variables.

First three quarters of 2018: price war on variable mortgages. Encouraged by the rise in the Euribor, banks reduce the spreads of their variable rate loans and, in some cases, put them below 0.90%.

Last quarter of 2018 and first months of 2019: interest rate rise. The controversy over the IAJD and the imminent approval of the new mortgage law leads banks to raise the interest on their mortgages, both fixed and variable rates.

Since mid-March 2019: reductions in fixed rates. After the announcement of the European Central Bank (ECB) to postpone the rise in interest, various entities begin to lower their fixed mortgages.

October 2019: more than a third of variable mortgages become more expensive. Various entities, mostly small and online, took advantage of the beginning of the last quarter of the year to raise the spreads of these products and / or to increase their commissions or initial interests. This reveals that banks want to increase the low margins they obtain with these loans and, also, that their clients opt for fixed rates.

March 2020: the coronavirus crisis begins. The Euribor has been trading higher since then, although for now it remains negative. It remains to be seen how this affects the rates applied in the following months.

The low interest rate of current mortgage loans cannot be understood without talking about the Euribor, which is the index to which the vast majority of Spanish variable mortgages are referenced. At the moment, it is trading negative after adding several consecutive collapses since March 2019.

The low rate of the Euribor also encouraged banks to lower the rate applied to their fixed mortgages, which are safer products for both entities (they have a lower risk of delinquencies) and consumers (the fee is always constant). This allowed the interest of these products to become the lowest ever seen in Spain.

The Euribor is currently trading at -0.081% (data from May 2020)

The interest on current mortgages leaves little profit margin for entities, which have sought other ways to increase the income they receive by granting them. Here are some of the main steps they have taken.

Mortgage in Spain - Online Calculator

Please remember you have a current interest rate example above.

Total amount

The total amount of money you will need including the down payment (so the price of the house?).

Down Payment

The amount of money you are willing to provide at once for buying the property.

Interest rate

The interest that the determinate bank offered you. Today in Spain this interest is around 1,72%.

Loan Term

Number of years you would like to pay the mortgage. Please notice that limits will depend on your age.

%
  • Principal Amount:
  • Years:
  • Balance Payable With Interest:
  • Total With Down Payment:

Initial fixed interest in the variables.

The vast majority of variable rate mortgages now include a fixed interest that applies only during the first year (or the first two) of the term. In this way, banks earn a little more money at the beginning of the loan, preventing the applied rate from being referenced to a Euribor at record lows.

Spreads

Since the beginning of October this year, several banks have chosen to make their variable rate loans more expensive, generally through higher spreads. They are still in the minority (they represent 36% of the offer), but it could become a trend in the coming months.

Mortgage in Spain

The last average rate of interest of a mortgages in Spain registered by the Bank of Spain reaches 1.72% (data from April 2020).

Stronger linkage

In order to obtain a reduced interest rate, it is essential, in most cases, to meet a series of bonding requirements, such as having your salary domiciled or taking out insurance mediated by the bank, cards or pension plans.

As we can see, the total cost of a mortgage loan does not depend solely on the applied rate. Therefore, before applying for one of these products, we recommend using a mortgage comparator, which shows the valuation of a mortgage loan taking into account all its characteristics.

Relocate to Spain with ®Expat Agency

TIN (nominal interest rate) or TAE (annual percentage rate):
What is more useful for comparing mortgages?

In many cases, when talking about interest rates, the annual equivalent rate or APR is also mentioned, an indicator that reflects the annual cost of a loan (mortgage or not) taking into account the interest applied and its other possible expenses: the commission opening, the price of the extra products, the deed expenses …

As we see, the APR should be a more complete measure than the nominal interest rate (TIN) of mortgages, as it gives us a better idea of ​​how much the operation could cost us. Therefore, in theory, it can be better for us to compare offers and find out which would be cheaper.

However, we must keep in mind that the annual equivalent rate is currently calculated for an unsubsidized mortgage. Explained in other words, this means that it is calculated taking into account only the interest that the bank would apply to us if we did not contract their combined products, if any. In addition, if the mortgage is variable, the law requires the APR to be calculated as if the initial fixed interest were applied throughout the life of the product (+ info here).

For all these reasons, it is advisable to look, in addition to the TIN and the APR, in all those aspects that are part of the mortgage loan: commissions, linked or combined services, etc. All of them appear in the fine print of the pre-contractual information that banks provide.

Compare listings

Compare