Staff Reporter
THE major rise in the cost of living that residents of Spain have seen since Russia’s invasion of Ukraine has been exacerbated by a rise in interest rates in recent months, with the ultra-low percentages paid on loans now something of the past.
While the situation is starting to improve, mortgage repayments are still taking a major chunk of households’ pay, which means that right now it is even more important than ever to choose the right home loan if you are thinking about buying a property on Spanish shores.
Property website Idealista has today revealed what it considers to be the best mortgage of the week, and it comes from Spanish bank Unicaja.
The mortgage is a mixed type, with a fixed rate of 3% over the first 10 years of repayments, before switching to an interest rate that’s pegged to the Euribor, the reference rate based on the average rates at which banks in the Euro zone are borrowing money.
After the 10-year mark, to be exact, the rate is the Euribor + 0.65% (4.2% annual percentage rate).
To qualify for this rate, however, the mortgage holder will have to meet certain conditions, such as having their paycheque paid into their Unicaja account, with a minimum income of €2,500 a month, as well as all of their bills coming out of the same account, and the use of the lender’s bank card for general spending.
Should the customer not meet these criteria, the rate for the mortgage comes in at 4.3% for the first 10 years before switching to Euribor + 1.95% (4.91% annual percentage rate).
As for the amount that customers can borrow with this mortgage, Unicaja will lend 80% of the purchase price for primary residences, and 70% if it is a second home.
The bank will apply a 0.15% commission for taking out the mortgage, while the term limit is 30 years for primary residences, assuming that the buyer is not aged over 75.
Should it be a second home, the term is limited to 25 years, provided the buyer is not over the age of 70 when the contract is signed.
Read more:
- Have a variable mortgage in Spain? Your bills will begin to fall soon – according to the national bank
- Spanish mortgage victory leaves British couple with €15,000 in their pockets thanks to bank compensation payout
