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How do I choose between fixed and variable rates for a mortgage?

Should I take a mortgage with fixed or variable rates?

Fixed-rate mortgages and variable-rate mortgages are the two main categories of mortgages you can pick. Of course, there are many other possibilities between the two.

Why would you take a fixed-rate mortgage?

A Fixed rate mortgage has the advantage that whatever the market conditions will do in the future, it will remain the same. To get that advantage, you will on average pay a higher rate than on a variable-rate mortgage, for instance, as of August 2021, mortgages with variable rates were issued at rates of 2.11% while those with fixed rates were issued with 2.7% for an average length of 24 years.

As we are writing, end 2021, Inflation rate is exploding in Spain: the level as of end October is 5,5%.

Why would you take a mortgage with a variable rate?

It could be because it is cheaper and because you don’t see inflation or rates going higher or because you are comfortable financially and can face higher rates. Another reason for variable rates to be cheaper is that for the banks issuing them, it matches their sources of funds (saving’s accounts).
So, to conclude, if you want safety, take a fixed-rate mortgage. If you see inflation spiking or interest rates going higher (in general due to a strong economy) you could as well go for a fixed-rate mortgages. Of course, the longer your mortgage is the higher your risk will be.
Don’t hesitate to ask to your Spanish mortgage broker a pricing with both and compare both offers.

November 2021 update

Due to inflation spiking around the world or due to the worldwide economic recovery (expectations), we see that while a year ago mortgages were initiated with variable rates, the trend just changed in 2021 and accelerated end 2021 so that now, 67% of mortgages are issued with fixed rates (as of August 2021). May be some people see a real risk of inflation spiking, which in turn should increase the variable rates.

Check the evolution of the percentage of mortgages with fixed and with variable rates

Are fixed mortgage rates cheaper than variable mortgage rates?

Check the evolution of the mortgage rates (average, fixed and variable )over the last year

Our other resources on “Spanish mortgage rates”

• Your definitive guide to your Spanish mortgage
• Our ultimate mortgage calculator

Looking for a mortgage or a local expert in Alicante, Malaga, Valencia, Madrid, Barcelona,…? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post How do I choose between fixed and variable rates for a mortgage? appeared first on How to buy in Spain.

A yearly growth rate of 23% for Spanish property transactions

The”Instituto Nacional de Estadistica” just released the last number of transactions for the month of May 2017: 44 782 properties were sold. Compared to May 2016, it is an annual increase of 23%. This is by far the strongest month for the last year.

Of those 44 782 properties, 7 733 are newly-built homes.

Since January 2017, 166 093 properties were bought, i.e. a growth of 10% against 2016.

The three regions with the biggest growth rate in 2017 are:

• Madrid with a growth rate of 25.8%
• Asturias with a growth rate of 19%
• and Extremadura with a growth rate of 16.7%

The regions with a negative growth rate in 2017 are:

• Basque Country
• La Rioja
• Navarre
• Region of Murcia
• Castile and Leon

On a monthly basis: all the regions benefit from positive growth rate apart from Murcia and La Rioja.

The four biggest regions are: Andalusia, Catalonia, Madrid and the Valencian Community

1. Andalusia with 27 480 transactions and a yearly change of +11%
2. Catalonia with 24 869 transactions and a yearly change of +14%
3. The Valencian Community with 22 588 transactions and a yearly change of 11%
4. Madrid with 18 022 transactions and a yearly change of 26%

Together those 4 regions represent about 60% of the transactions!!!

With no surprises, the four biggest regions in term of transactions are Andalusia, Catalonia, Madrid and the Valencian Community. Andalusia and Catalonia represent 16.5% and 15% of the transactions. Madrid represents 11% and the Valencian Community represents 13.5% of the transactions. It is interesting to compare this with our infographics on where the foreigners are buying real estate in Spain, you will find that Andalusia is the second biggest area for foreigners while the Valencian Community is the biggest region and Catalonia is the third.

Foreigners are active as well with 14% of the transactions during the last twelve months up to March 2017. Have a look at the transaction history in Spain for both Spaniards and Foreigners:

History of Real estate transactions in Spain, Spaniards and Foreigners

Yearly data. Source: Ministerio de Fomento

Check our full report on Why should you buy a property in Spain in 2017?

Source: Instituto Nacional de Estadistica

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post 23% more Spanish property transactions in May 2017 appeared first on How to buy in Spain.

The Ministry of development has released its Statistic of the residential real estate prices in Spain.

The average price per m² stood at 1,526 euros in the first quarter of 2017.

• An increase of 2.2% year-on-year and 0.9% on a quarterly basis
• It is the eighth consecutive quarter with annual growth of prices after 26 quarters of year-on-year drop in housing prices,
• The number of property transactions increased 6.5% in Annual terms
• After inflation, the housing price experienced a small drop of -0.5%,

Evolution by Autonomous Communities

• 11 of them presented a Year-on-year growth: with Catalonia standing out (5.4%), Madrid (4.9%), Ceuta and Melilla (4.2%), Canary Islands (3.9%), Cantabria (3.0%) and Navarre (2.6%).
• 7 communities still showed Year-on-year decreases: the most notable being Extremadura (-2.3%), Asturias (-1.7%), Aragon (-1.5%) and Murcia (-1.5%).

Have a look at our interactive map of real estate price evolution over the last year for all the Spanish Autonomous Communities at the top of our home page.

Evolution since highs of 2008

According to the historical series of this statistic, the average value per m² In the first quarter of 2017 was 27.4% lower than that of the level reached in the first quarter of 2008. In real terms (taking into account the Variation of the CPI), the current price reflects a fall of 32.7%. Since the third quarter of 2014, the price has recovered 4.8%.

Evolution of prices by age of the properties

The average value of the square meter less than five years old properties stood at 1,781.2 euros in the first quarter of 2017. This represents a year-on-year growth of 3.1%.

With regard to properties of more than five-year-old, the price reached 1,517.6 euros per square meter, a rise of 2.1% year-on-year.

Evolution of prices by cities

For municipalities with more than 25,000 inhabitants, the highest prices of private housing were presented at

• San Sebastian, 3286.0 euros / m²,
• Sant Cugat del Valles, 2875.8 euros / m²,
• Barcelona, 2851.5 euros / m²,
• Getxo, 2762.6 euros / m²,
• Santa Eulalia del Rio, 2747.3 euros / m²,
• Ibiza, 2713.5 euros / m²,
• Pozuelo de Alarcón, 2659.1 euros / m²
• Madrid, 0 euros / m².

The lowest prices in municipalities with more than 25,000 inhabitants are recorded in

• Elda, 520.0 euros / m²,
• Jumilla, 575.2 euros / m²,
• Ontinyent,581.1 euros / m²,
• Novelda, 585.8 euros / m²,
• Villarrobledo, 593.4 Euro / m²
• Alcoy, 608.5 euros / m².

The number of real estate transactions used to perform the calculation of housing prices in the first quarter of 2017 was 117,339, which is 6.5% more than in the same quarter of last year.

If you want to keep an eye on the trends of the real estate market in Spain:

• Have a look at our table of the Spanish Real estate prices and transactions from our Trend section.
• Have a look at our table of the Spanish Real estate prices per region from our Trend section.

Do you want to know 10+ reasons why you should buy in Spain? Read our full paper.

Do you want to have a more precise view on real estate price evolutions in Spain? Check our trend section.

Are you serious about Spain? Read our 8 legal steps to your Spanish property.

Source: Ministerio de Fomento

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

The post Spanish property prices up 4,8% since the bottom of Q4 2014. Still down 27.4% since 2008 appeared first on How to buy in Spain.

Sareb launches a new edition of its “Casas de Estreno” campaign and put 3716 properties on the market

The campaign data are the following:

• They will sell 3716
• It will last 3 months
• Properties are: Apartments & single-family homes
• It is spread over 16 autonomous communities: Andalusia, Aragon, Asturias, Baleares, Canarias, Cantabria, Castilla y León, Castilla-La Mancha, Catalonia, Comunidad de Madrid, Comunidad Valenciana, Extremadura, Galicia, La Rioja, Murcia and Navarra.
• 650 properties located in the Mediterranean arc
• Prices will range from 17,700 euros for a flat in Sayago (Zamora) to 394,417 euros for a 220 square meter villa in Das (Girona).

Distribution in the regions with the highest concentration of assets:

• the Region of Valencia is the region with the largest offer, with 816 units for sale. Alicante is the first region by the number of assets in the Community (359) and also hosts the cheapest in this community: a promotion of four tourist apartments in Mutxamel, each available for 26,300 euros.
• Castilla-La Mancha is the second region by a number of assets on sale this campaign.Of the 666 units offered, half are located in Toledo. The most economic price of this region is in Burujón (Toledo) and corresponds to a floor of 63 square meters.
• Andalusia contributes 537 homes to the commercial initiative of Sareb.Almería is the province that has a greater offer (201). It is also where the most economic asset of the region is found. A promotion of El Ejido has a floor of 62 square meters and a room, which goes to the market for 30,000 euros.
• In Castilla y León are located 474 homes.Half of the offer is concentrated in Valladolid, due to a large promotion in Arroyo de la Encomienda. Meanwhile, in Sayago, Zamora province, the cheapest apartment of the entire campaign (17,700 euros) is located.
• Murcia has an offer of 244 homes, with prices ranging from 33,000 euros for a flat in Torre Pacheco to 269,000 euros for a home in Murcia capital.
• Of the total of 227 homes that go on sale in Galicia, 80% are distributed between A Coruña and Pontevedra.
• The provinces of Gerona, Barcelona and Tarragona are almost equally distributed almost all of the 168 assets located in Catalonia that enter the Sareb campaign.
• Cantabria has 141 homes priced between 50,500 euros for a one-bedroom apartment in the municipality of Solares and about 316,897 euros for a three-family single-family residence in Ribamontán al Mar.
• Badajoz concentrates most of the 100 homes that go on sale in Extremadura, due to the completion of major developments in the city of Badajoz, Alange and Mérida.
• Of the 66 homes that go to the market in Madrid, the most economical is an apartment in Villalbilla that reaches a price of 58,000 euros.The most expensive is a four-storey townhouse in Colmenar Viejo, which is marketed for 339,006 euros.
• In Aragon, there are 90 homes for sale, of which two-thirds are concentrated in a single residential development in Calatayud (Zaragoza), which also offers the most economical price of assets traded in the region: 67,300 euros for a two-room flat.
• The cheapest housing of the 81 that go on sale in La Rioja is a flat of 44 square meters in Villamediana de Iregua, which is priced at 32,068 euros.The most expensive is a three bedroom apartment in Calahorra, for 171,300 euros.
• A flat of 43 square meters in Oviedo – whose price stands at 65,800 euros – is located as the most economical housing of the 65 that are located in Asturias.On the other side, there are single-family houses in the municipality of Noriega with a price of 242,000 euros.
• Almost all the homes that go to the market in the Canary Islands (28) are in a promotion of San Nicolás de Tolentino (Las Palmas), whose prices range from 33,000 to 80,000 euros.In Santa Cruz de Tenerife you can find 11 apartments, among which is the most expensive asset of those that go on sale in the Islands: 100,000 euros for a two bedroom apartment in the Las Rosas – Las Galletas area.

The details of all the houses included in the commercial initiative are available at www.SarebCasasDeEstreno.es. In this website, it is possible to consult the characteristics of each asset, its location and how to obtain more information.

The sale of the properties is carried out through Altamira Asset Management, Haya Real Estate, Servihabitat and Solvia, the four servicers in charge of management and commercialization of the assets of Sareb.

Have a look at our post listing all the bank portals listing bank properties for sale in Spain and here is our page of all those Spanish real estate bank portals.

Don’t forget, another big positive with those properties are that most of the time you can have a mortgage up to 100% of the value! Not bad.

For financial investors, here is how you could invest on Spanish bank repossessions without buying any yourself: “Are Spanish bank repossessions a good investment opportunity?”

Read the full press release in Spanish here.

Looking for an expert in Spain? Ask us directly!

Stéphane

Senior Analyst and Strategist at HTBIS

Check the full HTBIS team here

The post Sareb launches a new “Casas de estreno” campaign with 3716 properties on the market appeared first on How to buy in Spain.

Spanish Government will help young people for buying real estate from 2018

The Minister of Development, Íñigo de la Serna, has announced a new aid package for young people under 35 years who want to access a home starting 2018.

Here are the details on the project pending approval:

1. For both purchasing or renting a home
2. For people under 35 years
3. Starting in 2018
4. An aid of up to 10,800 euros.

Among the conditions:

1. The aid must not exceed 20% of the total price of the apartment
2. an annual salary that does not exceed 22,365.42 euros a year
3. not already the owner of a house
4. if rental, the aid will cover maximum 40% of the monthly rent (which should be of 900 euros maximum per month)
5. a maximum aid of 2400 euros per year per household

This aid to buy or rent a house for young people would be available in all the Autonomous Communities of Spain, as it is a Housing Plan sponsored by the Ministry of Development. Thus, it should be available in Andalusia, Aragon, Asturias, Cantabria, Castilla la Mancha, Castile and Leon, Catalonia, Ceuta, Extremadura, Galicia, Balearic Islands, Canary Islands, La Rioja, Madrid, Melilla, Murcia, Navarre, Basque Country And Comunidad Valenciana.

Find the official press release here.

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