A variable mortgage often starts with an interest rate lower than that of fixed-rate mortgages
A variable mortgage often starts with an interest rate lower than that of fixed-rate mortgages

Best variable mortgage options in Spain for non-residents

Variable rates offer more flexibility and typically have lower prepayment penalties compared to fixed-rate mortgages. Read our guide on the best variable mortgage rate options in Spain, including information on fees, interest rates, and more.

Delia Mihuț
Written by Delia Mihuț
Published at 2024-01-10T08:22:42Z
Last updated at 2024-01-31T15:14:52Z
Readtime 3 minutes

Spanish lenders provide a range of interest rate options for non-residents, including variable, fixed, and mixed mortgages. If you're seeking a lower initial rate and a more extended repayment period, a variable mortgage might suit you.

Continue reading to discover the best variable mortgage solutions for non-residents and learn how to negotiate your terms. 

What is a variable rate mortgage?

A variable mortgage has an interest rate that changes over time based on market conditions.

These mortgages often start with an interest rate lower than fixed-rate mortgages. After a specified period, known as the adjustment period, the interest rate may vary, either increasing or decreasing, based on market changes. 

How does a variable rate mortgage work?

The interest rate of a variable rate mortgage is adjusted periodically, every six months or annually.

The revised rate is directly influenced by changes in the Euribor and is usually calculated as a combination of this benchmark rate plus a fixed percentage. Your mortgage payments could vary periodically, depending on how Euribor evolves.

Advantages and disadvantages of variable rate mortgage in Spain

Advantages

  • the initial interest rate is usually lower than that of fixed-rate mortgages
  • longer repayment periods are available, typically ranging from 20 to 30 years
  • potential for lower payments if interest rates decrease

Disadvantages

  • unpredictability due to potential changes in monthly payments, which can make budgeting more challenging
  • the possibility of higher repayments if interest rates increase

When should you choose a variable mortgage rate?

Choose a variable mortgage if you expect changes in your financial situation. This could include a potential increase in income or the ability to pay off the mortgage early. 

Variable rates offer more flexibility and typically have lower prepayment penalties compared to fixed-rate mortgages. For tailored advice, consult a financial advisor. They can provide guidance based on your financial circumstances and the current economic context.

Quick comparison of the best variable mortgage options in Spain for non-residents

When comparing variable rate offers, remember that the interest rate for the first year is typically fixed at a promotional rate.

Bank Variable interest rate Best for
Sabadell 5.57% non-residents seeking a quick and straightforward application process
Cajasur 5.46% buyers looking to purchase a home in Costa del Sol and nearby Andalusian coasts
CaixaBank 5.70% borrowers in need of a loan of up to 2.900.000 EUR
UCI 6.15% individuals interested in a variety of mortgage options for new builds or fixer-uppers

Homevest conducted on January 2024 a cost comparison by evaluating the bank's offers for its clients and calculating the average effective interest rates over the past three months.

A fixed-rate mortgage could be the right choice if you prefer financial safety and predictability, without the need to worry about interest rates increasing. A mixed-rate mortgage, blending fixed and variable rates, is also a viable option. Explore the available options and stay informed about the latest market offerings.

The 5 best variable mortgage options in Spain for non-residents

Read on to better understand your options when applying for a variable mortgage rate from abroad. 

1/ Sabadell variable rate mortgage

The Sabadell variable mortgage is popular for those seeking competitive rates and favorable terms.

Highlights of this mortgage options include:

  • opportunity to reduce the interest rate by 0.75% with bonus products
  • no need for translation of documents if they are in English, German, and French 
  • a high minimum property purchase requirement of 150,000 EUR

Bear in mind that application outcomes may vary between branches, as each operates with its own rules. 

2/ Cajasur variable rate mortgage

If you're considering buying property in the south of Spain, particularly in the Andalusia area, the Cajasur variable mortgage might be an option worth exploring.

Some key details to consider: 

  • access to loans up to 1,000,000 EUR
  • a potential opening fee ranging from 0 to 1.5%, depending on the customer profile
  • a high minimum property purchase requirement of 120,000 EUR
  • a minimum net income of 2,500 EUR is required

3/ Caixa variable rate mortgage

The Caixa variable mortgage is a standout choice for financing in Spain, offering competitive terms within the market.

CaixaBank provides up to a maximum of 70% financing for second homes in Spain and offers:

  • access to loans up to 2,900,000 EUR
  • an option for a reduced installment, allowing customers to lower their interest rate by as much as 1%
  • free property valuation
  • the possibility of applying for a mortgage without needing to translate your documents

4/ Unicaja variable rate mortgage

The Unicaja variable mortgage offers an excellent choice for EU, US, and UK citizens seeking flexible terms.

Key details to consider:

  • the application process is entirely online, except for the notary office visit
  • eligibility for property purchases over 200,000 EUR with a maximum economic effort ratio maintained at 25%
  • a potential opening fee of up to 1%, which may increase the overall cost of securing the mortgage

5/ UCI variable rate mortgage

The UCI variable mortgage might be attractive if you're considering buying new constructions or fixer-uppers. UCI offers:

  • the option to include renovation financing in your mortgage, making it a compelling choice for buyers keen on customizing or improving a property
  • acceptance of a wide range of European currencies for income, serving a diverse range of customers across Europe

Request mortgage offers and compare them with Homevest 

Comparing mortgages for a Spanish property can help you effectively negotiate your terms. Negotiating your mortgage rates is standard practice, and this is where Homevest can assist you in securing the most advantageous deal.

Homevest makes banks compete to offer the best mortgage terms and works to reduce the time it takes to receive an offer to four days.

By choosing Homevest as your mortgage broker, you'll benefit from priority service from the banks, ensuring you secure your mortgage in time for the property signing.

Historically, variable-rate mortgages were more affordable due to the higher risk assumed by borrowers. Over the last year,  fixed-rate options have become cheaper, aligning with banks' anticipation of a decrease in interest rates over time. Explore the current Spanish mortgage rates and decide what’s best for you. 

If you're interested in comparing fixed vs. variable rate mortgages for non-residents, continue reading to learn about the pros and cons and other factors before making your choice.

Sources used and checked:

  1. Sabadell variable mortgage 
  2. Variable rate 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.

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