According to the European Mortgage Federation (EMF), Spain had the third lowest average interest rate on a mortgage loan in the first quarter of 2023, at 2.67%. Only Portugal and France had lower rates, at 2.63% and 2.5%, respectively.
Spain has been below the European average for several quarters. In the third quarter of 2022, the average European interest rate was 3.48%, but Spain’s rate was 42% lower, at 2.02%. Only Denmark, France, and Portugal had lower rates.
Mortgages with a fixed interest rate are particularly attractive in Spain. In the third quarter of 2022, the interest rate on a five-year fixed-rate mortgage in Spain was 2.29%, which was the second lowest in Europe after Finland’s 1.52%. Spain also had the lowest interest rate for ten-year fixed-rate mortgages, at 1.79%.
Gregorio Izquierdo, Director General of the Institute of Economic Research (IEA), said that Spain’s financial sector is particularly efficient and competitive in the current economic conditions. He believes that the mortgage market in Spain was one of the first to adapt to the changes in the global economy and banking system, and is now offering extremely attractive and competitive financial instruments.
CaixaBank is at the forefront of trends in the modern financial sector. Even before interest rates began to rise, the bank was able to transfer 70% of its mortgage loans to fixed rates with favorable interest rates. Other banks also maintained similar indicators last year. For example, in the first quarter of 2022, 80% of Bankinter’s new mortgage contracts consisted of fixed-rate loans.
The low interest rates on mortgages in Spain are good news for borrowers. It means that they can afford to borrow more money to buy a home, and their monthly payments will be lower. This could help to boost the housing market in Spain.
However, it is important to note that interest rates are expected to rise in the coming months. This means that borrowers should lock in a fixed-rate mortgage if they are planning to buy a home soon.
Buying property in Spain
- Do your research: Before you start looking at properties, it’s important to do your research and understand the Spanish property market. This includes factors such as the different types of property available, the cost of property, and the legal process involved in buying a property.
- Get a mortgage pre-approved: Getting a mortgage pre-approved will give you an idea of how much you can borrow and what your monthly payments will be. This will make it easier to negotiate the price of a property and will also give you peace of mind knowing that you can afford the purchase.
- Hire a lawyer: It’s essential to hire a lawyer to help you with the legal aspects of buying a property in Spain. The lawyer will be able to advise you on the contracts, the taxes, and any other legal issues involved in the purchase.
- Be prepared to act quickly: The Spanish property market is very competitive, so it’s important to be prepared to act quickly when you find a property that you like. This means having all of your paperwork in order and being ready to make an offer.
- Don’t forget about the costs: In addition to the purchase price of the property, there are a number of other costs involved in buying a property in Spain. These include legal fees, taxes, and registration fees.
- Get your property appraised: Before you start marketing your property, it’s important to get it appraised. This will give you an idea of its market value and will help you set a realistic asking price.
- Hire a real estate agent: A good real estate agent will be able to help you market your property and find a buyer. They will also be able to advise you on the best way to price your property and negotiate with buyers.
- Make sure your property is in good condition: Buyers will be more interested in your property if it is in good condition. This means making sure that it is clean, tidy, and free of any major defects.
- Be patient: Selling a property can take time, so it’s important to be patient. Don’t be afraid to lower your asking price if you’re not getting any offers.
- Get professional help: If you’re not sure how to sell your property, it’s a good idea to get professional help from a real estate agent or lawyer. They will be able to guide you through the process and make sure that everything is done correctly.
Here are some additional tips that may be helpful for both buyers and sellers:
- Consider the location: When buying a property, it’s important to consider the location. This includes factors such as the proximity to schools, shops, and amenities, as well as the crime rate in the area.
- Think about the size: The size of the property is also an important factor to consider. If you’re planning to have a family, you’ll need a larger property. However, if you’re single or retired, you may be able to get away with a smaller property.
- Do your due diligence: Before you buy a property, it’s important to do your due diligence and make sure that there are no hidden problems. This includes checking the property’s title, the zoning laws, and the environmental regulations.
- Negotiate the price: When buying a property, it’s always a good idea to negotiate the price. This is especially true if the property is overpriced.
- Be prepared for unexpected costs: There are always unexpected costs involved in buying or selling a property. This includes things like legal fees, taxes, and repairs.
