If you’re considering buying a property in Spain, it’s crucial to understand how mortgages work in 2025. Interest rates are slowly adjusting after the peaks of the past two years, and banks are introducing new conditions and requirements for borrowers. Making an informed decision can play a key role in your financial well-being for decades to come. In this article, we’ll cover everything you need to know about mortgages in Spain in 2025: types of loans, general requirements, how to choose the best option, which banks offer the most favorable conditions, and whether now is the right time to apply.
What Changes Have Occurred in the Mortgage Market in 2025?
The Spanish mortgage market undergoes changes every year, and 2025 is no exception. While interest rates are starting to stabilize, mortgages in Spain in 2025 are being granted cautiously by banks. There is a noticeable trend toward banks adopting an individualized approach to each borrower, depending on their profile, financial capacity, and the type of property they plan to purchase. Mortgage conditions published on bank websites are for reference and indicative purposes only.
One of the main changes in 2025 concerns variable rates. They are regaining popularity, with banks striving to lower the differential to make them more attractive. Variable interest rates in Spain are tied to Euribor and calculated using the formula “Euribor + X,” where “X” is the differential, typically ranging from 0.5% to 2.5%. The preliminary average Euribor value in May 2025 is 2.084%, reflecting a decrease of 0.059 percentage points compared to April 2025 and 1.596 percentage points compared to May 2024.
To illustrate the impact of Euribor on mortgage payments, let’s consider an example. Given: a mortgage in the province of Alicante for a property purchased on the secondary market. Purchase price: €200,000; associated taxes and fees: €21,849; down payment: €70,000. Total mortgage amount: €151,849. Term: 30 years. Rate: Euribor + 1.2%.
Comparison of monthly mortgage payments in April 2022, 2023, 2024, and 2025:
- 2022: Euribor + 1.2% → 0.013% + 1.2% Monthly payment – approx. €510
- 2023: Euribor + 1.2% → 3.757% + 1.2% Monthly payment – approx. €810
- 2024: Euribor + 1.2% → 3.703% + 1.2% Monthly payment – approx. €805
- 2025: Euribor + 1.2% → 2.143% + 1.2% Monthly payment – approx. €670
Experts predict a further moderate decline in Euribor, potentially reaching 1.5% by the end of 2025, with it remaining in the 1.5–2% range in 2026.
As for fixed rates, Spanish banks significantly increased them in 2022–2023 in response to the European Central Bank’s (ECB) key rate hikes. However, the trend reversed in 2024, and in 2025, you can expect to obtain a mortgage with a fixed rate of around 2.50%.
Mortgage Rates in Spain in 2025
Spanish banks in 2025 continue to offer three types of rates:
- Fixed: The monthly payment remains unchanged throughout the loan term. Ideal for those who prioritize stability and protection against potential future Euribor increases.
- Variable: The interest rate is reviewed every 6 or 12 months based on Euribor. Attractive in a declining rate environment, such as 2025, but carries higher long-term risk.
- Mixed: Combines an initial fixed-rate period (e.g., 5 or 10 years) with a variable rate for the remaining term.
The Most Favorable Mortgages in Spain in 2025
As banks regularly update their mortgage conditions to adapt to the current market situation, it’s essential to check their websites for the latest information. As of May 2025, the most favorable mortgage conditions are offered by the following banks:
Fixed Rate:
| Bank and Mortgage Name | Initial Period Interest Rate | Interest Rate for Full Term | Total Cost of Credit | Term |
| Banco Santander – Hipoteca Fija Bonificada | 2.55% for 6 months | 2.45% | 3.07% | 30 years |
| Banco Sabadell – Hipoteca Fija | 2.50% | 2.50% | 3.41% | 30 years |
| ABANCA – Hipoteca Fija Mari Carmen | 2.55% | 2.55% | 4.30% | 25 years |
| Openbank – Hipoteca Open Fija | 2.57% | 2.57% | 3.13% | 25 years |
| BBVA – Hipoteca Fija | 2.60% for 6 months | 2.60% | 3.55% | 25 years |
Variable Rate:
| Bank and Mortgage Name | Initial Period Interest Rate | Interest Rate for Full Term | Total Cost of Credit | Term |
| Kutxabank – Hipoteca Variable | 1.50% for 12 months | Euribor + 0.49% | 3.01% | 30 years |
| Unicaja – Hipoteca Variable (salary ≥ €2,000) | 1.99% for 12 months | Euribor + 0.50% | 3.61% | 30 years |
| Ibercaja – Hipoteca Vamos Variable | 1.50% for 12 months | Euribor + 0.60% | 3.57% | 25 years |
| Banco Sabadell – Hipoteca Variable | 1.90% for 12 months | Euribor + 0.60% | 3.58% | 30 years |
| BBVA – Hipoteca Variable | 1.99% for 12 months | Euribor + 0.60% | 3.63% | 30 years |
Mixed Rate:
| Bank and Mortgage Name | Initial Period Interest Rate | Interest Rate for Remaining Term | Total Cost of Credit | Term |
| Ibercaja – Hipoteca Vamos Mixta | 1.75% for 5 years | Euribor + 0.65% | 3.47% | 25 years |
| Cajamar – HipotecON a tipo mixto | 1.79% for 5 years | Euribor + 0.50% | 3.33% | 30 years |
| Banca March – Hipoteca mixta Avantio | 1.90% for 4 years | Euribor + 0.60% | 2.77% | 30 years |
| Banco Sabadell – Hipoteca Mixta | 2.00% for 3 years | Euribor + 0.75% | 3.18% | 30 years |
| ABANCA – Hipoteca Mixta Mari Carmen | 2.10% for 5 years | Euribor + 0.50% | 4.12% | 30 years |
Conditions for Obtaining a Mortgage in Spain in 2025
Although the requirements have not undergone significant changes, Spanish banks continue to carefully assess the solvency of their potential clients. To obtain a mortgage in Spain in 2025, you will need:
- Verified stable income.
- A permanent employment contract or sufficient experience as a self-employed individual.
- A down payment of 20% to 30% of the property’s value.
- A good credit history.
- A debt-to-income ratio not exceeding 35% (i.e., the monthly mortgage payment should not exceed 35% of your net monthly income).
Additionally, many banks require the purchase of related insurance policies, such as life or home insurance, linking your salary to a bank account, setting up automatic payments for mortgage installments and taxes for entrepreneurs, as well as utility bills, and obtaining debit and/or credit cards. Each additional financial product purchased can lower the interest rate by a few points.
Is It Worth Taking a Mortgage in Spain Now? Probably yes. If you’ve found a property that meets all your criteria—price, condition, location—you shouldn’t let it slip away. While rising interest rates in 2023 and 2024 deterred many buyers, conditions are noticeably improving in 2025. The market is stabilizing, and some banks are starting to offer products with more favorable rates, particularly for young people, families purchasing their first primary residence, and clients with strong financial capacity. Furthermore, government assistance programs for first-home purchases and guarantees for borrowers under 35 can, in some cases, simplify the process of obtaining a mortgage or allow it to be secured on more favorable terms.
Mortgages in Spain in 2025 for Non-Residents
Non-residents in Spain are finding it increasingly difficult to obtain a mortgage for property purchases, although some banks are willing to work with foreign borrowers. This primarily includes Banco Sabadell, Bankinter, and Banco Santander. Regarding Banco Sabadell, recent news announced its acquisition by BBVA, so changes in its operations and policies are expected. Bankinter works with non-residents, but its website lacks information on conditions. Therefore, let’s focus on Banco Santander, which offers a specific mortgage for non-residents—Hipoteca para No Residentes. The bank’s website features a calculator for making estimates. Let’s examine the rates offered by the bank for non-residents from Europe and beyond.
Input Data: A 40-year-old foreigner is purchasing a new-build property in Spain. They have no other loans, with a net income from employment of €2,500 per month. Purchase price: €120,000; requested loan amount: €72,000; loan term: 20 years.
- Applicant – a UK citizen residing in the UK. Conditions for a mixed interest rate: Euribor + 2.47% without bonuses and Euribor + 1.87% with bonuses. Conditions for a fixed interest rate: 4.65% without bonuses and 4.05% with bonuses.
- Applicant – a US citizen residing in the US. Same conditions.
- Applicant – a German citizen residing in Germany. Same conditions.
If the loan amount is increased, interest rates decrease. For a new property valued at €200,000, Banco Santander is willing to finance a non-resident borrower up to €120,000. The conditions for a mixed interest rate are: Euribor + 1.65% without bonuses and Euribor + 1.05% with bonuses; for a fixed interest rate: 3.79% without bonuses and 3.19% with bonuses.
Conditions for Obtaining a Mortgage in Spain in 2025 for Non-Residents
For a non-resident borrower to have a mortgage approved by a Spanish bank, the following points should be considered:
- Have a NIE. The NIE (Número de Identificación de Extranjero) is an identification number for foreigners, which also serves as a tax number. It is required for all foreigners purchasing property in Spain, with or without a mortgage.
- Country of permanent residence. Spanish banks are generally more willing to grant mortgages to non-residents who are citizens or permanent residents of countries with stable currencies (e.g., the US, UK, Switzerland, or any Eurozone country). Conversely, obtaining approval is significantly more difficult, or even impossible, if the borrower is from a country with an unstable currency or in a state of armed conflict. Mortgage law mandates that mortgages in Spain be issued in euros, but it allows the possibility of converting the mortgage to the currency in which the borrower receives their primary income. This is why special attention is given to the borrower’s country of residence and citizenship.
- Age. To apply for a mortgage, the borrower must be over 18 years old, and at the time of full loan repayment, their age should not exceed 75, although some banks allow an extension up to 80 years. The mortgage term for non-residents is typically limited to 20 years.
- Down payment, taxes, and fees. Generally, the borrower must contribute approximately 40% of the property’s value from their own funds: about 30% as a down payment and an additional 10% for associated costs and taxes related to the purchase. In comparison, Spanish banks are willing to finance Spanish residents up to 90% of the purchase price.
Documents for Obtaining a Mortgage in Spain in 2025 for Non-Residents
The exact list of documents may vary depending on the bank, but typically, the following are required:
- Identity Documents:
- Passport
- NIE
- Documents Proving Income for Salaried Employment:
- Two or three most recent payslips
- Tax returns for the last two years
- A certificate from the employer stating the type of employment contract, annual income, length of service, and position
- Bank statement with account activity for the last 6–12 months
- Documents Proving Income for Self-Employment:
- Financial statements with details about the company, sector, income, and profits for the last two years
- Annual tax returns
- Company account statements for the last two years
- Additional Documents:
- Credit history from the country of residence
- A copy of the rental agreement if there is passive income from renting out property
- Information about other sources of income (if applicable)
