Reductions in Spanish mortgage rates

What is happening in the Spanish Mortgage market

In an effort to increase in 2014 the level of Spanish mortgage loans, Spanish Banks  have started to launch new mortgage product and decrease overall rates.

The first area to see a change was in the reduction of the first year premium rates from being above the prevailing variable to offering first year rates that are below the current variables.

Moving on from this trend we are now seeing Banks reduce overall mortgage terms and decrease the margins above Euribor for subsequent years.

Spanish loan pricing 

For the last few years we have seen a regular trend of upward margins above Euribor across the board. Back before the crisis in Spain began margins were in the region of 1.25% for non resdients and as low as 0.50% above for residents of Spain. During the crisis these margins moved to as high as 6% above Euribor for non residents and 4% above for residents.

Gradually over the last few weeks we have seen the pricing drop for both international clients and residents of Spain. Some of the best rates out in the market are now as low as 1.95% above Euribor for fiscal residents and 2% above Euribor for international applicants.

Other Banks who have not reduced standard pricing are now however open to negotiation for quality applications.

Compulsory products

When buying in Spain those clients who require a mortgage will still find the rates offered come with linked products. These linked products will always include life cover which is often added as a lump sum at completion to ensure the cover is not cancelled at a later date.

How long due to new European supervision creeping in Spanish Banks will be able to maintain this practice remains to be seen.

Mortgage applicants should always check the FIPER which is issued at offer to see what linked products they are going to be required to take.

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