On December 22, in just ten days, the year’s most anticipated draw arrives: the Christmas lottery. This year the total prize pool climbs to 2,590,000,000 euros, thanks to an increase in the number of decimals per ticket—from 180,172 in prior years to 185 in 2023. As a mortgage advisor and comparison expert at iAhorro notes, that means the chance to win a prize is slightly higher because more tickets are on sale.
The first prize, El Gordo, awards 400,000 euros per tenth, which after taxes leaves 328,000 euros. The second prize is 125,000 euros, with 108,000 euros after tax, and the third prize is 50,000 euros, with 48,000 euros post-tax. Simone Colombelli, Mortgage Director at iAhorro, remarks that these prizes are becoming an appealing option for some winners. They may not quit work immediately, but they could enjoy a more comfortable and peaceful situation at home day after day.
El Gordo withstanding high interest rates and rising prices
iAhorro’s annual research shows that in 2023 many people are considering the rewards for living space. In the event of a shortage or win, El Gordo ranks as the second most requested option (21.4 percent of votes) for the first time since 2019, behind only the goal of paying debts or improving finances, which accounts for more than half of responses (51.4 percent). By contrast, saving to create a financial cushion has declined for three straight years, falling 1.4 points to 19.9 percent in a single year, a level last seen in 2020 at 25.1 percent.
Colombelli explains that this shift stems from the reality of rising rates and prices. Lottery prizes like El Gordo may be the only feasible route for many Spaniards to afford a home. ECB official rates sit around 4.5 percent, and in major cities such as Madrid and Barcelona, housing prices are not expected to fall as soon as the broader market. In Barcelona, in particular, prices continued to rise rather than decline.
Among the debts Spaniards would like to tackle with a windfall are mortgage payments for those already owning a home. The iAhorro spokesperson warns that amortizing a mortgage becomes one of the most valuable options when rates climb, though the overall cost of the mortgage may still be lower than other debts. Higher priority debts like high-interest credit cards or personal loans still demand attention.
Colombelli notes that Banco Mediolanum’s Alessio Zambón advises anyone considering amortizing a variable-rate mortgage with lottery funds to analyze whether the payoff justifies a shorter-term loan or a lower remaining balance after many years, especially since long-term mortgage loans are subject to rate fluctuations over time.
Deposits as a short-term investment option
For those seeking a more relaxed use of the money, Zambón points out that there is no one-size-fits-all good or bad investment product. The key is alignment with personal goals and time horizons. Beyond the current context, it remains essential to have a financial plan that covers major objectives such as buying a home, funding children’s education, and saving for retirement. From there, it’s about selecting products that best support those goals.
iAhorro’s research shows Spaniards most often choose deposits or savings accounts (47.7 percent) and investment funds or stocks (20.8 percent), with about 19.8 percent aiming to gain benefits from rental or sale opportunities. The Mortgage manager at iAhorro explains that Spaniards tend to be conservative, favoring deposits tied to various rewards or housing, which requires a larger initial investment.
Deposits remain the preferred bet for Spaniards, although returns have risen only modestly this year. A deposit offers liquidity to cover unforeseen events or provide a cushion. Mutual funds or stocks tend to require a longer horizon and target goals such as capital growth or retirement income, notes Colombelli. The modest 0.7-point increase in the share choosing these products from 2022 to 2023 may reflect improved market performance in recent months.