Jos Deuling, Friday, 24 November 2017
Interest rates Spain
The rates of most Spanish mortgages are based on the
. Euribor stands for
Euro Interbank Offered Rate. It is the interest rate that European banks use to lend each other money.
The mortgage in Spain is composed of the Euribor rate plus an additional percentage of X%, where X varies between 0.75% and 2%. Euribor + 1% is often
The Euribor rate varies from 1 week to 12 months. With a monthly Euribor, you pay a lower base rate, but this involves of course a greater risk than
the annual Euribor.
Below 2 graphs with the development of the Euribor rate in recent years.
Addtional percentage and costs
As you can see, the Euribor is very low at the moment. Many Spanish banks already keep in mind that interest rates will rise again in the coming
years. They currently offer mortgages with rates around 2%. The difference with the Euribor interest rate of around 1% they use to line their
own pockets. You should also be careful with banks that offer a low mortgage rate, but add high charges. Furthermore, it seems that Spanish savings
banks charge a higher rate than commercial banks.
If you go shopping in the Spanish mortgage market, pay attention to the additional percentage banks add to the Euribor rate. This percentage is
usually between 0.75% and 2%. Outliers to 3 or 4% are also found. Pay also attention to the costs that the bank charges. The cheapest mortgage in
Spain is not always the mortgage with the lowest interest rate.
Always get several quotes and take sufficient time to assess the offer. Spanish banks are required to publish a summary of interest rates. These
are valid for 14 days so you do not have to accept the offer immediately. If you have multiple bids, you can negotiate the best deal.