Updated July 2019
Comparative Analysis of Current Home Loans in Spain
As the Euribor finds itself in free fall, some of the most popular banks in Spain – Banco Santander, BBVA, CaixaBank, Bankia and Banco Sabadell – are clearly leaning towards encouraging fixed rate mortgages from their clients.
Banco Santander Fixed Rate Mortgage
Banco Santander Fixed Rate Mortgage is the best example. This entity lowered this products’ interests a few days ago between 0.35 and 0.46 percentage points to 1.55% at 15 years, 1.65% at 20 years and 1.79% at 30 years. Clients wanting to access this type of mortgage must be able to finance a maximum of 60% of the price of the house and subscribe to several of the bank’s services (have their salary directly paid into that account, take on some of the bank’s insurance products, etc.).
Fixed mortgage BBVA
BBVA also reduced the interest on its Fixed Rate Mortgage a couple of weeks ago between 0.20 and 0.25 points, currently offering a rate of 1.35% at 15 years, from 1.55% at 20 years and from 1.95% at 30 years. To be able to access this offer, customers must have their salary directly paid into that account and sign a home and life insurance through the same entity.
Mortgage Bankia
Bankia’s Fixed Rate Non-Commissioned Mortgage has reduced its interest between 0.10 and 0.55 percentage points, leaving a minimum rate of 1.95% at 15 years, from 2% to 20 years and from 2.10 % to 30 years. This offer applies to customers who can have a salary of 3,000€ or more directly paid into that account. Customers are not expected to contract any other products.
Banco Sabadell Fixed Mortgage
Banco Sabadell, on the other hand, has not varied its Fixed Bonus Mortgage’s interest rates for a few months now, although theirs is already one of the lowest rates in the market: 1.90% at 30 years. For customers to be able to obtain the maximum benefits associated to this loan, the entity expects customers to have their salary directly paid into that account and to contract three different types of insurances through them – home, life and payment protection.
CaixaBank Fixed Mortgage
CaixaBank – with a fixed interest of 2.75% at 20 years and 3.15% at 30 years – can also improve its initial offer depending on the client’s profile. In addition, CaixaBank offers mortgages in foreign currency for those clients who reside outside the euro zone. For instance, a British client may have a mortgage in Spain in pounds through CaixaBank.
The financial team at Fuster & Associates will be happy to find the best mortgage conditions for you.
Please, don’t hesitate to contact us with any queries.
Orginial post 2017
Fixed mortgages have revolutionized the housing market, putting their variable rate rivals in the shade in less than a year. The latest data from the Spanish statistics office, the INE maintain that 4 out of 10 completed mortgages are now linked to a fixed interest rate, which is an historical high.
Experts have been keen to recommend fixed rate mortgages on the basis that you are able to pay the same monthly repayment throughout the term of the loan, protecting you against any possible financial shocks in the future.
Fixed mortgages can be a good alternative for those who need financing to buy a home, particularly with interest rates and euribor at current historical lows. Although they are more expensive initially, fixed rate mortgages will not be affected when the variable mortgage rates rise.
Most Spanish banks currently offer some very attractive fixed rate mortgage deals. Here we take a look at five of the most competitive offers available on the market:
BMN Fixed Mortgage
BMN was formed following a merger with Bankia and currently offers the cheapest 20-year fixed mortgage on the market, with an interest rate of just 1.9%. The repayments on borrowing €100,000 are around €500 per month and you are able to borrow 80% of the property purchase prices, plus associated taxes and fees.
The drawbacks of this mortgage are the number of bonds required to secure the finance. For example, a BMN bank account is required into which your salary must be paid, as well as taking out the bank’s own home insurance, life insurance and pension plan.
Another downside of the BMN mortgage is the opening commission of 1% and also that it is subject to an early cancellation charge. For example, if you wanted to pay off part of your mortgage with them within the first five years of taking out the loan, you would have to pay interest of 0.50% and at any point thereafter this is reduced to 0.25%.
Fixed mortgage Santander
Santander has strengthened its position as leader of the Spanish mortgage market after the absorption of Banco Popular and is also ranked as offering one of the most competitive fixed mortgages. Its 20-year fixed mortgage is subject to interest of 2%, which translates into a monthly payment of about €505 for a loan of €100,000 euros and allows financing up to 80% of the purchase price.
As well as being the second cheapest offer in the ranking, another of its benefits is that you can access Santander’s interest-bearing current accounts, offering interest of 1% on payroll receipts of between €1,000 and €2,000 euros, as well as a range of bonuses and discounts on educational expenses covering kindergartens, schools and universities,
On the downside and similarly to BMN home loads, this fixed rate mortgage requires quite a lot of qualification to attract the 2% interest rate, such as paying salary into a current account, contracting home and life insurance and setting up a pension. There is also the same early repayment charge of 0.5% in the first five years reducing to half after that period.
‘Mortgage Mari Carmen’ by Abanca
Abanca takes third place in the list of best fixed mortgages, with an interest rate of 2.05%, equating to a monthly fee of about €508 on €100,000. As with the others, a bank account is required into which your salary is paid together with home and life insurance however, Abanca offers up to 90% of the purchase price, considerably more than other banks are prepared to fund.
The one quite significant con of Abanca’s fixed rate mortgage is that the requisite insurance policies are extremely expensive attracting 2% interest payments.
Ibercaja ‘Mortgage Tranquility II’
Another of the most competitive entities of the moment in the offer of fixed loans to 20 years is Ibercaja. Its ‘Mortgage Tranquility II’ is subject to interest of 2.1%, implying a monthly repayment of €510. In order to qualify for this mortgage, there are standard requirements for a bank account, home and life insurance.
One of the drawbacks of Ibercaja’s fixed-rate mortgage is that the monthly payment is somewhat more expensive than Abanca, BMN and Santander.
Bankinter 20-Year Fixed Mortgage
Bankinter charges the same interest rate of 2.1% as Ibercaja, which means that the monthly payment to be paid is also around €510 euros. For this mortgage, the bank requires you open a bank account, take out home and life insurance and open a pension plan.
Among its cons is the mortgage opening fee of 1%, with a minimum payment of €500 and cancellation fee of 0.5% in the first five years of the loan reducing to 0.25% from then. This mortgage finances up to 80% of the price of the property. To counteract the downsides, Bankinter allows you to benefit from its ‘Payroll Account’, which includes a remuneration of 5% APR in the first year and 2% in the second, paying a maximum of €5,000.
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