MORTGAGES in Spain are no longer among the cheapest in Europe.
Interest rates in September sat at an average of 1.94% in Spain, above the 1.79% euro zone average and higher than Germany (1.86%), France (1.51%) and Italy (1.79%).
But don’t let that put you off investing in Britain’s favourite holiday hotspot.
While rates have increased, there may be room for competition among lenders to offer borrowers lower rates.
It comes after the Spanish government ruled that banks should pay the stamp duty tax, a highly divisive decision that split the country’s Supreme Court.
Prime Minister Pedro Sanchez has tried to qualm concerns that the cost would be passed onto consumers.
The competitive market, he argued, would ensure banks do not pass on the added cost to clients through higher interest rates or other fees.
While this does not necessarily ring true as already, some banks are increasing interest rates during the initial fixed-term period, there are still a host of other pull factors making Spain a sound investment for 2019.
For starters, mortgages are available for up to 70% loan-to-value, although there are better lending terms available for loans of 60% or less.
This year is also – hopefully – set to finally bring some certainty to British buyers almost three years after the Brexit vote.
If common sense prevails and a deal is made, clients will be able to plan and purchase with more comfort in knowing what their funds can buy.
If the British sterling recovers strongly against the Euro, we could see a spike in British investors after years of uncertainty and a slight dip.
Although, as we saw in 2018, any gap made by reluctant Brits is quickly filled by new markets, most notably Scandinavians, Belgians, Dutch as well as the ever-present Middle East, proving that Spain is still a buoyant market.
And the figures don’t lie, with the number of mortgages granted in Spain rising by 20.4% last year.
And if you’re wondering where to invest this year, look no further than Andalucia, which was the region with the third highest number of mortgages approved in 2018, following the ever-hot Madrid and tourist mecca Catalunya.
But if you do choose to take the plunge, whether it be for investment purposes or to start a new life in the sun, the Finance Bureau will be here to get you the best mortgage deal possible, with 15years experience in dealing with banks and lenders.
Visit us at our Marbella office or call us on +34952801401