The now highly developed mortgage market throughout Spain has grown over the years as the country’s economy has become more advanced.
This is portrayed through the sheer breadth of mortgages available to consumers; both organised through well known banks or tailored mortgage brokers.
Much like other economically developed countries, the Spanish mortgage market is a competitive one, with lenders fiercely trying to win over new customers and retain their current ones. This has led to a great range of mortgage deals on offer; each resulting in vast overall price differences.
This becomes even more evident in the difference in charges the same banks may offer in alternative branches – this is quite surprising, considering the interest rates’ on all mortgages throughout the country are based on the EU base rate.
The majority of Spanish lenders operate similarly to those in other countries with regards to their lending contracts. This being to offer customers a fixed interest rate for say 5 or 7 years, and then following this, switch to their variable rate, which will fluctuate based upon the EU base rate.
Unlike in other countries where it is not uncommon for a mortgage to span 25 or even 30 years, such practices have only recently been introduced by Spanish lenders. This has been one of the contributing factors to the recent Spanish property boom.
With regards to the actual amount you will be loaned, the interest rate and the mortgage’s flexibility, your personal Credit Rating will be used, and will thus such factors will vary from customer to customer.
In most cases you will be lent up to a maximum of 80% worth of the property’s value, you will therefore require a rather hefty deposit, especially if you are looking for a more up market property.
Moreover, if the mortgage you are taking out is for a holiday home, lenders consider this more of a risk and may only be willing to lend as little as 60% worth of the property’s value.
