In Spain there are many self-governing regions, each with their own local federal governments, so it will be difficult to detail each and every circumstance ranging from Valencia to Bilbao, Barcelona to Seville, but this post will attempt to provide an in-depth overview of the general scenario, rather than a gloss-over of the bottom lines.
Maybe the very first point to point out is that in Spain there are 2 main monetary entities that you can use for a home loan from. These entities are often simpler to acquire a mortgage from, although conditions can frequently be simpler manipulated to the favour of the caja, rather than those rules rigorously set down by the Banco de España.
It's extremely typical in Spain for an interest rate to be used to your loan amount on a yearly basis, with a modification each calendar year, around the exact same date as you sign your home loan. This implies that although interest rates may fluctuate, as they tend to do, then if you happen to sign your mortgage in the "greatest peak" of interest, then you will pay that quantity of interest for the whole year - even if interest rates go down. Home loan "trackers" working on a month to moth basis, known across the world, are unknown in Spain.
Just to make things more complex, 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 Interest rate, although it deserves keeping in mind that within the Eurobor, there is a different (always higher) Euribor Mortgage rate.
The 2nd Rates of interest that might be applied is the more stable IRPH, which takes approximately the previous 4 months Euribor then calculates the rate this way. Any loan from a bank or building society will charge the customer (that's you) among these two rates, plus anywhere between 1-3%, depending upon the threat, size of the residential or commercial property, offered guarantors, etc. (keep in mind, my example here is for very first time purchasers).
Any loan from either entity normally has a 1% opening charge on the net price, and the very same for any cancellation prior to the time of the loan expires - loans are typically offered for Thirty Years, although recently, certain banks have actually offered loans of as much as 50 years, or those which will be inherited by next of kin/offspring. This suggests that switching and changing mortgages over banks is nearly difficult in Spain, given the expenses included. A 1% cancellation fee in one bank followed by a 1% opening cost in the 2nd (even if this is waived) means that there has to be website a significant saving on the general conditions used by another entity for it to be beneficial considering. It almost ends up being a stock market video game, playing the possibilities of the possible rise in inflation - something that couple of people saw coming in the latter part of 2008.
Possibly the first point to discuss is that in Spain there are two primary financial entities that you can use for a mortgage from. It's very common in Spain for an interest rate to be used to your loan sum on an annual basis, with a modification each calendar year, around the exact same date as you sign your home mortgage. This indicates that although interest rates might vary, as they tend to do, then if you happen to sign your home loan in the "highest peak" of interest, then you will pay that amount of interest for the whole 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.