Fixed-rate or variable mortgage in Spain

This is one of the first questions you need to ask yourself when you’re looking to take out a mortgage. What do you prefer, risk or security? In Spain, you can apply for either of these mortgage types. If you want some advice from me, let me explain my own experience.

A few years back, when I had to move to Seville for work, I had the opportunity to settle there in the long-term. My goal was to stop paying rent, which saw me throwing my money down the drain every month, and instead apply for a mortgage that would allow me to pay for my home in instalments.

Once I found a flat that I liked and started to look at the financing options available, the banks offered me the choice of a fixed-rate or variable mortgage. Back then, the interest rates were great, making the variable mortgage option a good choice. But in the end I decided to go with a mortgage that offered a fixed rate of interest. Why? People told me I was crazy, that it was a waste of money. But time proved me right. Soon enough, the interest rates rose again and my financial situation hadn’t changed. The mortgage repayments stayed the same and I was able to pay it off without making any major adjustments. Some of my friends, meanwhile, were finding it difficult to get to the end of the month. Ultimately, it gave me the chance to enjoy a certain level of stability that is almost impossible to find nowadays.

Right now there are some great fixed-rate mortgage options available. Nowadays, the difference between a fixed-rate or variable mortgage is nothing like it was a few years ago. In addition, contracting a fixed-rate right now guarantees very low rates of interest.

For example, the 20-year fixed-rate mortgage is one of the most attractive options on the market. This mortgage also come with other advantages, since it is targeted at expatriates who are looking to purchase a house in Spain, meaning that they help you complete all the paperwork in your own language, amongst other things.

So now you know, if you want to buy a home in Spain then keep your eye out and, if you can, take a good look at a fixed-rate mortgage.

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September 26th 2019, 09:44

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