Mortgages in Spain
Competitiveness in the market for Purchase Mortgages Spain has hotted up.
With interest rates dropping some Spanish Banks have been quick to respond. After many months of stagnation in mortgage product offerings. Now the market is beginning to move. Keen to capture market share of quality non resident lending. Both large and more niche lenders are currently very active.
Spanish Banks improve product offerings
Spanish Banks are focused predominately on the medium to higher end of the Spanish mortgage market. A variety of very good deals for a mortgage in Spain exist, for property above 1m euros. Rates from as low as 2.5% fixed for 20 years can currently be achieved.
Some of key lenders, include Abanca, Banca March and La Caixa. Having fixed their sights on obtaining a strong market share of 500k plus purchase mortgages Spain.
As is always the case headline rates cannot be taken in isolation. All lenders require linked products to offer their best possible terms and conditions. Also criteria the client must meet is high. Debt to income ratios need to be low. Earnings need to be above average and the client needs to work in industries that are historically stable.
What can affect a mortgage application in Spain
Currency of earnings can affect access to borrowings. Non resident mortgage applicants earning in major currencies like GBP or US Dollar should not experience any issues. Based on currency alone.
With the Golden Visa program soon to be rescinded many buyers are looking to secure a purchase soon. The good news being that as long as 500k of their own money is invested, the rest can be taken on a Spanish mortgage. With rates from 2.5% fixed for the full term borrowing can be an attractive option.
For those buying at the lower end of the price spectrum a wide range of lenders exists. Fixed rates from 2.75% for a high quality clients are still achievable. However many lenders in Spain will have a minimum purchase price in order to obtain best pricing.
Clients wishing to purchase below 100k may find loan to values restricted to 60% and less favorable conditions.
However with a wider range of Banks available to them it is worthwhile shopping around. Also taking expert advice on what is possible as a non resident. At IMS we can offer complete advice and guidance on nwat you can achieve.
Interest rates are dropping in Spain
Whilst the Euribor is dropping. January 2025 the 12 month Euribor is 2.436%. Fixed rate products are generally offered below the prevailing variable. With less flexibility on redemption penalties they are not right for all mortgage applicants. Therefore understanding the Spanish purchase mortgage market before making a decision is always a good idea .
Spanish Banks are now starting to review and change product facilities more often than historically was the case. Keeping on top of what is available is a crucial role a broker in Spain plays. It remains the case that for the right client, and with professional presentation of an application reduced rates can be gained. These will be specific to the individual client and the overall risk.
The non resident mortgage market in Spain remains a small but important part of Spanish lenders offerings.
2024 Spanish mortgage activity
The back end of 2024 showed a significant improvement in the number of Spanish mortgages contracted. In October the amount of new loans was up 60.8% on same month of 2023. Alos up 24.8% over September. With interest rates dropping, business is increasing. Buyers who had put off buying due to high costs are starting to come back to the market.
