In Spain there are lots of autonomous areas, each with their own regional federal governments, so it will be difficult to detail each and every scenario ranging from Valencia to Bilbao, Barcelona to Seville, however this post will try to offer a detailed summary of the basic situation, instead of a gloss-over of the bottom lines.
Possibly the very first point to point out is that in Spain there are two main financial entities that you can use for a home mortgage from. These entities are often easier to gain a home loan from, although conditions can frequently be much easier controlled to the favour of the caja, rather than those guidelines carefully set down by the Banco de España.
It's incredibly common in Spain for an interest rate to be applied to your loan amount on a yearly basis, with a modification each calendar year, around the exact same date as you sign your home loan. This implies that although interest rates may fluctuate, as they tend to do, then if you happen to sign your home mortgage in the "greatest peak" of interest, then you will pay that quantity of interest for the whole year - even if interest rates go down. Home loan "trackers" working on a month to moth basis, known across the world, are unknown in Spain.
Simply to make things more complex, there are then 2 different types of indexes your bank or building society can chose to employ concerning your policy. The Euribor is the European Rates of interest, although it deserves noting that within the Eurobor, there is a separate (always greater) get more info Euribor Home loan rate.
The second Interest rate that may be used is the more steady IRPH, which takes an average of the previous 4 months Euribor and then calculates the rate in this manner. Any loan from a bank or building society will charge the customer (that's you) one of these two rates, plus anywhere in between 1-3%, depending upon the danger, size of the residential or commercial property, available guarantors, and so on (keep in mind, my example here is for first time buyers).
Any loan from either entity usually has a 1% opening cost on the net price, and the very same for any cancellation prior to the time of the loan ends - loans are normally provided for Thirty Years, although in the last few years, certain banks have offered loans of as much as 50 years, or those which will be inherited by next of kin/offspring. This suggests that switching and changing mortgages over banks is nearly impossible in Spain, given the expenses involved. A 1% cancellation fee in one bank followed by a 1% opening cost in the second (even if this is waived) means that there has to be a significant saving on the basic conditions provided by another entity for it to be worthwhile thinking about. It nearly becomes a stock market game, playing the possibilities of the possible increase in inflation - something that few individuals saw coming in the latter part of 2008.
Possibly the very first point to discuss is that in Spain there are 2 main monetary entities that you can apply for a home mortgage from. It's very common in Spain for an interest rate to be applied to your loan amount on an annual basis, with a modification each calendar year, around the exact same date as you sign your home mortgage. This implies that although interest rates might fluctuate, as they tend to do, then if you take place to sign your home loan in the "greatest peak" of interest, then you will pay that amount of interest for the whole year - even if interest rates go down. Mortgage "trackers" working on a month to moth basis, understood throughout the world, are unknown in Spain.