Investors have discovered that fixed mortgages in Spain are more appealing than ever, particularly as interest rates are at their lowest level. Even foreign home-buyers are able to benefit from the generous offers advertised by Spain's most popular banks, including Banco Sabadell, CaixaBank and Banco Santander.
Advantages of a Fixed Mortgage
When you apply for a fixed mortgage, the interest rate is set at a particular level for a set number of years. It helps you plan your finances for the years ahead because you always know what your monthly payments will be. By contrast, a variable mortgage is influenced by the unstable financial markets that cause the interest rates to fluctuate. Traditionally, fixed mortgages have usually had much higher interest rates compared to variable mortgages. But the recent cut in interest rates and the Euribor, have helped reduce the fixed mortgage percentage to a new low level. Interest rates will inevitably rise again, but if you have a fixed mortgage, your repayments will be unaffected.
Fixed Mortgage Facts
The average fixed mortgage rate could be around 2.86% compared to 2.05% for a variable mortgage. Some of the most up to date facts about fixed mortgages have just been released by the Instituto Nacional de Estadisticas (INE). They show that in September 2020, Spanish interest rates had reached a record-breaking low of 2.44%. Two months later, the rate was only 2.45% and there are still positive signs of continued, financial stability. In recent months, a fixed mortgage has been the preferred choice of an unprecedented 47.4% of investors in Spanish real estate.
Fixed Mortgage Repayments
According to the INE, the average mortgage costs 136,676 euros and will last approximately twenty-four years. The exact figure depends on your individual circumstances, but the length of your mortgage could range from fifteen years up to thirty years. You have to complete the repayments between the ages of sixty and seventy-five years of age. A fixed mortgage makes it easier for the bank to assess the monthly payments and your ability to pay back the loan.
The mortgage interest rates for foreign real estate investors are usually much higher than those for Spanish residents. However, with the recent cut in interest rates, the margin is now much narrower. If you are relocating to Spain, you could apply for a fixed mortgage that has almost the same interest as one that's offered to a local resident. When the bank offers you a fixed mortgage, it will consider all aspects of your individual circumstances including your debt to income ratio.
Fixed Mortgages in the Costa del Sol
Purchasing a luxury villa or apartment in the Costa del Sol has always been a popular investment for Spanish residents and ex-pats. But the current level of low interest rates should make your investment have an even greater value as your repayments won't alter even if there's an increase in interest rates. Costasol Properties can help you find the best fixed mortgage that will be perfect for your circumstances. We are based in Puerto Banús and have fifteen years of experience in helping our clients find the best properties and fixed mortgages on the Costa del Sol. Our full range of real estate services includes mortgage assistance and legal support. Whether you're a Spanish national or a visitor from abroad, the low interest rates have provided an incredible opportunity to purchase a luxury villa or apartment by applying for the best fixed mortgage.