In Spain there are lots of autonomous areas, each with their own local governments, so it will be difficult to information each and every situation varying from Valencia to Bilbao, Barcelona to Seville, but this short article will try to give a comprehensive introduction of the basic scenario, rather than a gloss-over of the main points.
Maybe the first point to discuss is that in Spain there are 2 main financial entities that you can look for a mortgage from. The banks in Spain work all on a comparable basis, and are classes as Bancos - International brand names such as BBVA and Banco Santander will be familiar with many readers. The 2nd kind of entity are the "cajas" or "cajas de ahorros" which are usually autonomous societies, formed as savings banks or developing societies - typically born in fruitful autonomous areas and periodically broadening nationwide. Perfect examples would be Caja Madrid, Catalunya's La Caixa, and Caixa Catalunya. These entities are in some cases simpler to gain a mortgage from, although conditions can frequently be much easier controlled to the favour of the caja, rather than those rules rigorously set down by the Banco de España.
Now within the Cajas or Bancos, there are different items available when it pertains to taking a loan out on a property. For the sake of example, let's take a first time buyer on a starter house. Maybe among the primary differences in any type of loan from a financial entity is the type of interest paid. It's incredibly common in Spain for a rate of interest to be applied to your loan amount on a yearly basis, with a modification each fiscal year, around the exact same date as you sign your home mortgage. This suggests that although rates of interest might change, as they have the tendency to do, then if you happen to sign your mortgage in the "highest peak" of interest, then you will pay that amount of interest for the entire year - even if interest rates go down. This has the advantage of always knowing your monthly spending plan of costs, however the reverse holds true because if you accompany a peak which then drops drastically, you're stuck to the exact same rate for the remainder of the year. Home loan "trackers" working on a month to moth basis, known across the world, are unknown in Spain.
Just to make things more complicated, there are then 2 various types of indexes your bank or building society can decided to employ regarding your policy. The Euribor is the European Rates of interest, although it deserves keeping in mind that within the Eurobor, there is a separate (always higher) Euribor Home mortgage rate.
The 2nd Rate of interest that may be applied is the more stable IRPH, which takes an average of the previous 4 months Euribor then computes the rate by doing this. Any loan from a bank or building society will charge the client (that's more info you) one of these 2 rates, plus anywhere in between 1-3%, depending on the risk, size of the property, readily available guarantors, and so on (remember, my example here is for first time purchasers).
Any loan from either entity usually has a 1% opening cost on the net cost, and the very same for any cancellation before the time of the loan expires - loans are usually given for 30 years, although in current years, specific banks have actually provided loans of up to 50 years, or those which will be acquired by next of kin/offspring. This indicates that swapping and altering mortgages over banks is nearly impossible in Spain, offered the costs included.
Perhaps the very first point to mention is that in Spain there are 2 main monetary entities that you can apply for a home loan from. It's extremely typical in Spain for an interest rate to be applied to your loan amount on an annual basis, with a modification each calendar year, around the very same date as you sign your home loan. This suggests that although interest rates may change, as they tend to do, then if you occur to sign your home mortgage in the "highest peak" of interest, then you will pay that quantity of interest for the entire year - even if interest rates go down. Home loan "trackers" working on a month to moth basis, understood across the world, are unidentified in Spain.