Tuesday. 18.06.2024

Data from the Central Bank of Spain confirm that the average price of mortgage loans is at its lowest now. 

As a consequence, mortgage interest rates are at historic lows. And in a post-pandemic context of recovery and reopening of the economy, this is pushing many people, both Spanish and foreign, to purchase property in Spain.

The question many home buyers are asking is, which banks are now offering the lowest interest rates?

According to the Central Bank of Spain, the average price of mortgage loans was 1.57% APR in September. This was its second lowest value ever.

In view of these results, the financial comparison website HelpMyCash has published which are the banks that offer the mortgages with the lowest interest rate.

BBVA: 1% fixed rate

According to HelpMyCash, the BBVA Fixed Mortgage is, within its modality, the one with the lowest interest for the average customer. This is 1% for a repayment period of up to 15 years; 1.20% if the money is returned up to 20 years, 1.30% if it is returned up to 25 years and 1.45% if the repayment period reaches 30 years.

But caution, because to contract this mortgage clients have to meet other conditions. They must contract other BBVA products and services to obtain such a low interest rate.

The bank requires the client to directly deposit a salary of at least 600 euros or a pension of 300 euros per month to a BBVA bank account and contract life and home insurance with them. If none of these requirements are met, the interest rate is one percentage point higher.

BBVA finances loans for amounts up to 80% of the price of a habitual residence or up to 70% of a second residence, to be repaid in a maximum of 30 years. This mortgage does not have an opening commission, but it does have an early repayment commission (2% in the first ten years and 1.5% thereafter).

Abanca: Euribor + 0.85% spread

With regard to mortgages with a variable interest rate, the lowest is the Mari Carmen Mortgage offered by the Galician bank Abanca, according to HelpMyCash. This product offers a rate that would be the sum of Euribor + 0.85% spread. However, the bank allows a fixed interest of 0.85% during the first year.

As in the previous BBVA mortgage, the Galician bank offers the possibility of gradually reducing the interest rate in exchange for meeting three requirements: having an account with a regular income of at least 600 euros per month and taking out home and life insurance.

If none of these conditions are met, the interest rate increases by 0.70 percentage points.

Abanca offers to finance up to 80% of the value of the first residence or up to 60% of that of a second residence with a term of up to 30 years, provided that the buyer is under 45 years of age, since it estimates that the money must be repaid before buyer's 75th birthday.

Abanca does not charge opening commissions or full or partial early repayment.

Even cheaper

These are the two mortgages with the lowest interest rate, but HelpMyCash points out that there are banks that offer even cheaper mortgages for the average client even if their interest rate is higher.

The financial comparator explains that the price of the loans is not only conditioned by the interest rate, but also by the commissions that banks may charge and the cost of additional products, such as insurance or cards, that must be contracted.

Financial experts advise asking several banks for information to find out which one would be cheaper. They also emphasize that there is room to negotiate some of the conditions with each bank.

Mortgages with the lowest interest rates in Spain