If you’re thinking about buying a home in Spain, now is an exciting time! The European Central Bank recently made its eighth interest rate cut, bringing the deposit rate to 2%. This has pushed the Euribor, the main index for mortgages in Europe, to a record low of 2.081%—and experts predict it could dip below 2% soon.
This is great news for homebuyers, especially those with variable-rate mortgages, who can make considerable annual savings (up to €3,100 for a €300,000 loan). Banks are also getting competitive, slashing fixed mortgage rates to around 2%. With more cuts expected by September 2025, the mortgage market is becoming more and more interesting.
Whether you’re a resident or non-resident, there’s never been a better time to explore your options. Let’s dive into what this means for you and how you can secure the best mortgage deal.
As of June 2025, the average mortgage rate in Spain for property purchases is between 2.97% and 3.08%. Residents can expect rates from 2.5% to 3.9%, while non-residents typically see slightly higher rates, between 2.9% and 4.9%, depending on the lender and the financial profile. Fixed-rate mortgages are averaging 3.05% to 3.17%, while variable-rate mortgages, tied to the Euribor, sit at 2.82% to 2.94%.
Loan terms and deposit requirements vary.
Residents usually need a 20%–30% deposit, while non-residents may need 30%–40%. The lower the Euribor goes, the more attractive variable-rate mortgages become, but fixed-rate options are still the go-to for most buyers, offering stability in uncertain times.
Foreign buyers are flocking to Spain’s property market, and Germans are leading the pack. In Q1 2025, they made up 16.6% of foreign mortgage applications, up from 15.3% in 2024, according to idealista. British buyers follow at 14.2%, with Swiss, American, and French buyers also showing strong interest. Foreigners account for 3.6% of all mortgage applications, with most financing 71%–76% of the property price. Germans tend to request smaller loans, averaging €149,000, compared to the foreign average of €181,000. Swiss and U.S. buyers, however, often seek loans above €200,000.
The most popular regions? The Valencian Community (27%), Andalusia (21%), and Catalonia (15%) are top destinations for foreign buyers. Completed transactions show average loan amounts of €204,000, with purchase prices nearing €350,000, signaling robust interest in Spain’s housing market. Interestingly, 84% of buyers are choosing fixed-rate mortgages for predictability, but with rates dropping, variable-rate options could make a comeback soon.
With Spanish interest rates going down, you have a unique opportunity to lock in a great mortgage. But navigating the market can be tricky—especially if you’re a non-resident or new to Spain’s property scene. The solution is to work with the best professionals!
As your trusted real estate expert, I can guide you through the process, and connect you with the best mortgage brokers, who will help you secure the best terms for your dream home. You can save thousands on your mortgage by making the right choice.
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