What are the Spanish mortgage rates for foreigners?

Understanding mortgage rates in Spain is important if you're a foreigner planning to buy property in this country.

Whether you're an investor, planning to live in Spain, or just exploring real estate, knowing your choices can help you make the best decision.

In this guide, we'll cover fixed, variable, and mixed-rate mortgages, and give you practical tips to get the best rate you can.

What are the mortgage rates in Spain for foreigners?

As of August 2024 (the latest data available), the average interest rate for new home mortgages in Spain is 3.30%, according to the Spanish Institute for Statistics, ENI.

But you have to remember that the actual rate you get will depend on the specific bank, type of mortgage, and your financial profile, as well as credit rating from your home country(s).

More people are taking out mortgages, with the number of home mortgages up by 8.8% compared to last year. This shows growing confidence in the market and more opportunities for foreign buyers.

The average mortgage amount has also increased by 5.3%, now at €145,352. Interest rates can change with economic conditions, so it's important to stay updated and act when rates are good.

What will happen to Spanish interest rates in 2025?

CaixaBank anticipates that the ECB will lower interest rates in 2025, which would reduce borrowing costs and make Spanish mortgages more appealing.

With the current rate at 3.5%, CaixaBank forecasts that the Eurozone interest rate will eventually stabilize between 2% and 2.25%.

A rate cut by the ECB is expected to have a direct effect on the housing market, boosting demand, increasing transactions, and driving up property prices.

Variable rate mortgages in Spain

Variable-rate mortgages in Spain are currently offered at an average starting rate of 3.02%.

Some of the best variable-rate mortgages are from banks like BBVA and Santander. The latter offered us a 2.41% interest rate for the first year and Euribor +2.41% for the rest of the term.

These types of mortgages are attractive because they often start at a lower rate than fixed mortgages.

Pro — Flexibility to adjust your financial strategy if market rates fall.

Con — Harder to predict long-term interest costs.

Fixed-rate mortgages in Spain

Fixed-rate mortgages in Spain currently have an average rate of 3.51%. Popular banks offering good fixed-rate products include Sabadell and Bankinter.

Bankinter's website explicitly says, "Nationality is important for banks, and the criteria and conditions vary accordingly. The process is normally easier if the buyers come from wealthy countries." So, keep that in mind.

Pro — Easier financial planning, as the rate stays the same for the whole term, making monthly payments predictable.

Con — Fixed rates can provide a sense of security but might end up being more expensive if variable rates drop significantly over time.

Mixed-rate mortgages

Mixed-rate mortgages usually start with a fixed rate for the first 3, 5, or 7 years, and then switch to a variable rate. Sabadell offers a mixed-rate mortgage with a rate of 2.75% for the first 3 years, and the Euribor + 1.75%.

Pro — Gives you stability at the start and flexibility later, which can be helpful if you plan for changing financial needs.

Con — Switching to a variable rate later means less certainty, which might make long-term planning harder.

What are the banks in Spain that offer mortgages for foreigners?

Here are some banks that offer Spanish mortgages for foreigners:

• Bankinter: With this well-known bank, you can't access fixed mortgage options if your income is not in EUR. Still, there's no maximum loan amount for borrowing.
• BBVA: Limited to non-residents earning in Euros. You can get a loan for up to 2,000,000 EUR.
• Cajasur: Has good options for homes in Costa del Sol and Andalusian coasts.
• HolaBank by CaixaBank: Offers fixed interest rate and variable rate for loan amounts between 100,000 and 2,900,000 EUR.
• Sabadell: Offers some of the best mortgage deals in Spain with a minimum property value requirement of 70,000 EUR.
• Santander: Open to applicants of various nationalities with no need to translate documents in English, French, Italian, Portuguese, Swedish, German, or Spanish.
• UCI: Offers flexible options, including mortgages for new-builds and renovations.
• Unicaja: Suitable for properties over €200,000 with a financial effort ratio below 25%.

How can you access the best Spanish mortgage rates for foreigners?

To get the best mortgage rates in Spain, consider these tips:

• For investors: Show stable income and a strong financial profile to get better loan-to-value (LTV) ratios.
• For home buyers: Have a larger deposit (usually 30%) ready to improve your chances.
• For Digital Nomads: Show proof of income, even if it's non-traditional, by demonstrating consistent earnings over time.
• For Self-Employed: Keep good financial records, and consider hiring a local advisor to understand Spain's rules.

Homevest connects you with mortgage brokers in Spain

If you've found a property, Homevest matches you with a broker who can help secure the right financing for your profile.

Working with a mortgage broker gives you access to a variety of lenders and products, allowing for personalized solutions and potentially the best rates available.

Apply now to receive multiple offers and secure favorable terms—all for free.

Frequently asked questions

We've put together some common questions about mortgages in Spain for foreigners.

1. What is the interest rate in Spain?

The average Spanish mortgage rate for home mortgages is around 3.30%, but it can vary depending on the type of mortgage and bank.

2. What are the mortgage conditions in Spain?

Mortgages for foreigners usually need a down payment of at least 30%, along with proof of income and employment.

3. Is it possible to renegotiate the rate?

Yes, you can renegotiate, especially if interest rates drop or your financial situation improves.

4. Are the interest rates higher when your income is in another currency?

Yes, having income in a different currency might result in higher rates because it's riskier for the lender.

5. Can I get a mortgage in Spain if I'm self-employed?

Yes, you can get a mortgage as a self-employed person, but you'll need to show detailed financial records to prove you have steady income.

Conclusion

Whether you should buy now or wait depends on your situation. As we can see, interest rates are averaging around 3.30% and people are taking almost 10% more mortgages than at the same time last year.

In the end, fixed rates offer stability, variable rates provide flexibility, and mixed rates give a bit of both.

Understanding these options will help you make the best choice. Compare offers and negotiate to get a mortgage that suits your financial needs as a non-resident.

Sources used and checked October 2024:

1. INE
2. Santander
3. Bankinter
4. Sabadell
5. Caixabank
6. Will surging house prices in 2025 affect mortgages in Spain?

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.