Mortgage interest Spain

What do you need to know about mortgage interest in Spain?

Anyone who wants to buy a house in Spain will almost always deal with a mortgage – and therefore with mortgage interest. But how exactly does mortgage interest work in Spain? What is the difference compared to the Netherlands or Belgium? And what should you watch out for when choosing between fixed or variable rates? In this article, we answer the most frequently asked questions.

What is mortgage interest and how does it work in Spain?

Mortgage interest is the fee you pay to the bank for the money you borrow to buy a home. In Spain, you usually pay this interest monthly, together with part of the repayment.
The interest can be fixed, variable, or mixed. With a fixed interest rate, you know exactly what to expect, while a variable interest rate can change during the term, depending on the Euribor rate. Spanish banks usually review the variable rate every 6 or 12 months.

Mortgage interest Spain 2025: what are the current rates?

In 2025, mortgage interest rates in Spain generally range between 3% and 4.5%, depending on the term, loan amount, and your personal profile. The exact rate is often determined based on the Euribor, plus a margin set by the bank.
Foreigners or non-residents often receive slightly higher rates, especially if they finance a lower percentage of the property. Good preparation and comparing banks definitely pays off.

Fixed or variable mortgage interest: what is wise?

With a fixed rate, your monthly payments remain the same throughout the entire mortgage term. This provides certainty, especially when interest rates are low. A variable rate can rise or fall depending on the market interest rate.
In Spain, variable rates have historically been more popular, but due to rising rates, more buyers today choose a fixed rate. A mixed mortgage interest rate, where you have a fixed period first and then switch to variable, is also an option.

How is mortgage interest calculated in Spain?

Spanish banks consider several factors when determining your rate. Think about your income, age, type of property, the loan-to-value ratio (LTV), and whether you are a resident or not.
Taking out additional products, such as a bank account, insurance, or pension plan with the same bank, can also influence the rate. This is known as a “bonification.”

Mortgage interest for non-residents: what are the differences?

Non-residents, such as foreign buyers purchasing a second home in Spain, usually receive an interest rate slightly higher than that offered to Spanish residents. The maximum loan amount is often lower as well (typically 60–70% of the purchase price).
However, more and more Spanish banks are offering competitive rates to foreign buyers. Especially with a good broker or mortgage advisor, you can negotiate favorable terms even as a non-resident.

Is mortgage interest tax-deductible in Spain?

For most buyers, mortgage interest is not tax-deductible in Spain, unless you purchased a property as a resident before 2013. Non-residents usually do not have a right to deduction.
There may be tax benefits in your own country (for example, the Netherlands), depending on how the property is used (private residence, rental, second home). Be sure to get good advice from a tax expert familiar with cross-border situations.

How do you get the lowest mortgage interest rate in Spain?

Compare multiple banks and preferably work with an independent mortgage advisor experienced with foreigners. Submit a strong application with complete documentation, and be prepared to take out additional products with the bank.
A higher down payment reduces the bank’s risk and can positively influence your rate. Also, a longer term or choosing a fixed rate can be advantageous, depending on the market situation.

Conclusion: choose wisely, get good advice

Mortgage interest in Spain plays a major role in your monthly payments and total costs. By understanding how it works, you can make better choices—whether you choose fixed or variable, as a resident or non-resident. Get good guidance, because the right mortgage interest rate can save you tens of thousands of euros over the term.

Want to know which rate you can get for your situation?