According to the latest figures from the National Statistics Institute, roughly six out of ten mortgages in the country carry fixed interest rates, favored by people who want predictable monthly payments. In the Organización de Consumidores y Usuarios, it is noted that the mortgage landscape remains stable, with conditions holding steady compared to last month. The organization explains that the ripple effect from the European Central Bank’s rate hikes is already evident through slower bank lending activity.
The European Central Bank raised rates again by 0.25 percentage points to 4.50 percent in September. It was indicated that there may be no further increase in the near term, though a decrease is not anticipated soon. This suggests that borrowing costs could stay elevated for an extended period.
In September, Spain’s annual inflation reached 3.5 percent, up 0.9 points from August, largely driven by higher fuel prices. Core inflation, meanwhile, eased by 0.3 percent to 5.8 percent in September.
Against this backdrop, the mortgage market shows resilience, according to OCU. Banks have paused upward adjustments to mortgage rates for now, and terms for both fixed and variable loans remain aligned with the previous month.
Best fixed mortgages
Fixed-rate offers without extra conditions now exceed 3 percent, and lower rates may be obtained only by meeting specific requirements. These are among the most notable fixed-rate offers for a 100,000 euro loan over 15 years.
Bad news for mortgage holders: It will happen in April 2024
OCU’s analysis identifies the current best fixed mortgages. A scenario was modeled for a 100,000 euro mortgage with a 15-year term:
- BBVA offers a 2.80 percent fixed mortgage with no opening costs. To qualify, a payroll deposit of at least 600 euros is required and a home insurance policy plus depreciation insurance covering at least half of the loan must be purchased from BBVA.
- OpenBank presents a 3.05 percent fixed mortgage with no origination fee. Eligibility requires payroll or pension residency or a monthly income of at least 900 euros (1,800 euros if owning more than one property), plus home insurance with OpenBank.
- Coinc offers 3.25 percent on fixed mortgages. Automatic payroll payments are not required, but a Non-Salary Account must be opened with Bankinter to access this rate.
On the other hand, for those interested in a variable-rate mortgage, the best market options available this October are explored here, including mortgage simulations to estimate monthly payments. For details on accessing the Spanish Mortgage Association (AHE), readers are directed to the corresponding guidance. [Citation: AHE materials]