In Spain there are lots of self-governing regions, each with their own local governments, so it will be difficult to information each and every situation ranging from Valencia to Bilbao, Barcelona to Seville, but this post will attempt to offer a detailed summary of the basic situation, rather than a gloss-over of the bottom lines.
Perhaps the first indicate point out is that in Spain there are two main monetary entities that you can request a home loan from. The banks in Spain work all on a comparable basis, and are classes as Bancos - International brands such as BBVA and Banco Santander will be familiar with a lot of readers. The 2nd type of entity are the "cajas" or "cajas de ahorros" which are typically self-governing societies, formed as savings banks or constructing societies - often born in productive self-governing areas and occasionally expanding across the country. Perfect examples would be Caja Madrid, Catalunya's La Caixa, and Caixa Catalunya. These entities are often easier to gain a home loan from, although conditions can typically be much easier manipulated to the favour of the caja, rather than those guidelines rigorously set down by the Banco de España.
Now within the Cajas or Bancos, there are various products on offer when it concerns taking a loan out on a residential or commercial property. For the sake of example, let's take a very first time purchaser on a starter house. Maybe one of the main differences in any type of loan from a financial entity is the type of interest paid. It's incredibly common in Spain for a rate of interest to be applied to your loan amount on a yearly basis, with a modification each fiscal year, around the very same date as you sign your home mortgage. This means that although interest rates may fluctuate, 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 entire year - even if interest rates go down. This has the advantage of always knowing your monthly budget of spending, but the converse holds true because if you accompany a peak which then drops considerably, you're stuck to the very same rate for the remainder of the year. Home mortgage "trackers" dealing with a month to moth basis, understood throughout the world, are unidentified in Spain.
Simply to make things more complex, there are then two different types of indexes your bank or building society can decided to utilize 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 an average of the previous 4 months Euribor then computes the rate by doing this. Any loan from a bank or building society will charge the client (that's you) one of these 2 rates, plus anywhere in between 1-3%, depending on the risk, size of the property, readily available guarantors, and so on (remember, my example here is for first time purchasers).
Any loan from either entity normally has a 1% opening fee on the net rate, and the exact same for any cancellation prior to the time of the loan ends - loans are typically offered for 30 years, although in recent years, particular banks have offered loans of up to 50 years, or those which here will be inherited by next of kin/offspring. This means that switching and changing home loans over banks is almost difficult in Spain, given the expenses involved.
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 exceptionally common in Spain for an interest rate to be used to your loan sum on a yearly basis, with a revision each calendar year, around the exact same date as you sign your mortgage. This suggests that although interest rates might fluctuate, as they tend to do, then if you occur to sign your home mortgage in the "highest peak" of interest, then you will pay that amount of interest for the entire year - even if interest rates go down. Home mortgage "trackers" working on a month to moth basis, understood across the world, are unknown in Spain.