Spanish Mortgage market news for 2025
The Spanish Mortgage market 2025, has seen interest rates drop. Since the beginning of the year.
The 12 month Euribor published by Bank of Spain for August 2025 is 2.079%. This is a small decrease from July. Whilst the interest rates are falling slowly, there is a definite downward trend.
Spanish interest rates for non resident applications
Spanish Banks are offering non resident applicants competitive fixed rates. It is now possible to obtain 3.3% fixed for the full term. On a fairly standard basis. For Spanish Mortgage applicants, who fit criteria very comfortably. Then below 3% is possible.
A non resident applicant who requires less than 70% loan to value. Has low affordability ratios. Can provide historic stable and regular incomes. Also high quality past debt performance. Will be able to negotiate very good terms and conditions.
Variable rates are between 1% to 1.5% above the 12 month Euribor. With linked products it is possible to gain a margin of below 1%.
Spanish lenders
Within the Spanish mortgage market 2025, Spanish lenders are more focused on medium to higher level loans. Very few lenders will now consider loans for property below 75k. Many have minimum property prices of over 100k. The cost of setting up a loan for Spanish Banks. Since the regulation of 2019, has increased.
Often meaning a profit is not made in year 1. After initial costs are taken into account. Smaller loans make it difficult to recoup the costs from interest earnings. This has had an impact on their desire to lend at the lower end of the market.
In addition in the case of default, the quality of the property has a big bearing on ability to cover the debt. The cost of repossession action is also high. So lower price property in a fire sale will leave the Bank in Spain out of pocket.
Risk assessment of a mortgage application in Spain
Spanish mortgage lenders continue to work very much on an individual basis. When risk assessing a mortgage application in Spain. Whilst they have a range of rates they can offer. There can be a big difference between rates at bottom end. Versus rates at top end.
The risk departments will consider a number of factors. The quality of the property. The loan to value required. What the overall situation is of the applicant. Including industry they work in. Stability of incomes. Past debt performance. Resident or non resident mortgage application.
In addition to this the overall profitability of the loan. Throughout its term. So linked products contracted. Like life or house insurance. Balances to be held in Bank account. Other add ons.
Benefits of using a motgage broker in Spain
Ability to shop around a variety of lenders has never been more important. To achieving the best terms and conditions.
The best terms and conditions can normally be achieved by using a broker. However only a broker who is fully independent. Has the correct Bank of Spain registration. Therefore able to undertake applications on an independent basis. Some brokers can only act as introducers. Limited to a couple of Banks. When using a broker it is important to check what status they have.
Future for Spanish Mortgage market 2025
It is anticipated rates will continue to fall slowly through 2025. Also that Spanish lenders will remain active in the non resident mortgage market. Continue to offer competitive terms and conditions. And negotiate rates for the right profile of client.
