Re: Re: Available mortgage types – rates reasonable / interest o


I’m no expert but in my experience nearly all Spanish mortgages are repayment and follow a system that tries to even out the monthly payments during the mortgage term – so at the beginning of the term most of the your monthly payments go towards interest payments and towards the end of the term most of the payments go towards paying off the debt. People not familiar with this system get caught out because they think that after say 5 years of a 25 year mortgage they will have paid off a fifth of the debt when in fact they have paid off much less.

In my experience most Spanish mortgages allow you pay off up to 20% of the debt in any year free of charge, so you can take advantage of any extra money you might have.

I looked into a second residence mortgage last October and got offered 3 year fix at 3.95 % followed by euribor + 1.6% for a 30 year term. At the time the mortgage rates were increasing on a monthly basis so it wouldn’t surprise me if the best you could find now is euribor + 2%.

The problem is that Spanish banks are being forced to recapitalise which makes it difficult for them to give out mortgages, especially interest only ones.