Cities where mortgage costs outpace rent in Spain
The share of major Spanish cities where paying a mortgage exceeds the monthly cost of renting rose last year. In 2023, nine of the 63 largest cities with populations above 100,000 saw mortgage payments surpassing rent, compared with six such towns in 2022. The cities including Cádiz, Bilbao, and Madrid joined the list, joining San Sebastián, Alcobendas, Palma de Mallorca, Marbella, La Coruña, and Pamplona, according to the latest findings from appraiser UVE Valaciones. The trend reflects changes in financing costs and housing markets across the country.
Experts caution that higher installments do not automatically mean renting is preferable in the long run. The analysis notes that only in San Sebastián does renting appear clearly more favorable over the long term. The balance shifts toward purchase when loan payments are roughly 35% higher than rents. The calculations also account for insurance, community fees, or taxes that may not be included in rent, along with electricity, gas, or water consumption where applicable.
Nevertheless, monetary policy changes and fluctuations in Euribor have altered the affordability picture. The study from UVE Valaciones shows that by the end of 2022, 40 cities had mortgage payments exceeding 75% of average rent. That figure has risen to 44 municipalities, with about 70% of the 63 large cities now having populations above 100,000. These shifts show how financing conditions influence the relative attractiveness of buying versus renting across Spain.
Cities where rent is lower than mortgage
There are twelve cities where buying with a mortgage is financially more advantageous than renting, because the typical mortgage payment does not even fully cover the rent. Locations such as shine, Cordova, Algeciras, Murcia, Reus, Badalona, L Hospitalet de Llobregat, Alicante, Lleida, Saint Coloma de Gramenet, Tarragona, and others demonstrate that owning can reduce monthly costs when taxes, maintenance, and ownership expenses are considered. In these areas, the monthly ownership cost aligns closely with or undercuts renting, underscoring wealth-building potential and the broader appeal of property ownership.
As a concrete example, renting in L’Hospitalet de Llobregat for an 80 square meter apartment can cost around 1,300 euros per month. By contrast, a mortgage payment on a similar loan might be about 820 euros per month under typical terms, such as a 24.5-year loan with an interest rate around 4.27% (latest figures from the Spanish Mortgage Association). When the down payment, ongoing costs, and taxes are factored in, the loan payment represents a significant portion of the home’s value over time, making ownership financially compelling in many cases.
The broader takeaway is that although mortgage payments can be favorable in certain markets, the hurdle for first-time buyers remains substantial. The main obstacle is the down payment: potential buyers often need to save the equivalent of 28–32% of the purchase price, plus the portion not financed by lenders (commonly around 20%) and associated taxes and closing costs (roughly 8–12%). This reality helps explain persistent calls for policy measures that facilitate access to financing and reduce upfront barriers. Advocates highlight options such as state guarantees that enable financing beyond typical loan-to-value limits, which could make ownership more accessible for younger buyers and first-time homeowners.
These insights illustrate how the balance between renting and buying varies across Spain, driven by mortgage rates, local rent levels, and the cost structure of ownership. For some cities, renting remains a prudent choice, while in others the long-term benefits of owning are more pronounced. The evolving mortgage environment continues to shape households’ housing decisions across the country, with policy instruments and financing conditions playing pivotal roles. Sources and calculations throughout the analysis come from UVE Valaciones, a firm known for its appraisal work and market studies.