Calculate Mortgage Spain

How high is the monthly payment on a Spanish mortgage?

The monthly payment depends on three variables: the loan amount, the interest rate, and the term. The higher the amount or the interest rate, and the shorter the term, the higher the payment – the three factors interact, they don't simply add up. Enter your own figures into the calculator above: it shows you the monthly payment, the interest over the entire term, and the repayment schedule, for fixed, variable, and mixed (mixta) interest rate models. There's deliberately no blanket figure given here – every mortgage in Spain works out differently, depending on the bank, your creditworthiness, and the property.

How it's calculated

Spanish banks almost always calculate using the French annuity method, called cuota constante in Spain: a monthly payment that stays the same throughout the entire term. Only the ratio between the interest portion and the principal repayment portion shifts from payment to payment. At the start, you mainly pay interest on the full outstanding balance; with each payment, the outstanding balance falls and so does the interest portion – the repayment portion grows accordingly, while the total payment stays the same.

The calculator above is based on a simple model: twelve equally long months, the first payment one month after disbursement, no short first period. Your bank's actual repayment schedule may differ slightly – due to the day-count convention, a different disbursement date, or its own rounding rules. What ultimately counts is what's actually stated in the FEIN (Ficha Europea de Información Normalizada, the European standardised information sheet for your loan) and in the escritura – the notarial deed in which the final mortgage conditions are set out.

It's also important to distinguish between the TIN and the TAE. The TIN (tipo de interés nominal) is the nominal interest rate used to calculate the payment – exactly the figure the calculator above asks for. The TAE (tasa anual equivalente) is the effective interest rate: it factors in fees, commissions, and any linked products such as insurance, which is why it's almost always higher than the TIN. Compare bank offers using the TAE, but enter the TIN into the calculator.

Fixed, variable, or mixta

Spanish banks nowadays almost always offer three interest rate models – this is a market-practice classification, not a legal category:

• Fixed (fijo): The interest rate is fixed for the entire term. Your payment doesn't change, regardless of which way the market moves.
• Variable (variable): The interest rate is made up of an index – in Spain almost always the Euríbor, the reference rate at which European banks lend money to one another – and a fixed margin set by the bank (diferencial). The payment is usually recalculated annually or every six months, once the current index value is known.
• Mixed: A fixed-rate phase at the start, after which the mortgage automatically switches to variable. The calculator above reflects both phases and shows you the new instalment from the first month of the variable phase.

With the variable model, it's worth taking a look at the law: Article 21.3 of Ley 5/2019, the Spanish mortgage credit law for consumer properties, prohibits the bank from imposing a contractual interest rate floor on you – the former "cláusula suelo" is thus no longer permitted. Conversely, Article 21.4 also rules out a negative contractual interest rate: if Euríbor plus margin falls below zero, your rate is capped at zero, but does not go below it. The calculator above reflects exactly this limit if you enter a negative Euríbor value.

How much equity you need

The loan-to-value ratio – how much of the purchase price the bank actually finances – is set by each bank individually. There is no legal limit for this and no documented, universally valid market range; enter in the calculator above the figure stated in your specific bank offer. Whether the bank bases this on the purchase price or on the tasación – the valuation carried out by a licensed surveyor on behalf of the bank before approval – is stated in your offer; ask specifically about this, as the two figures often differ.

Equity involves more than just the difference between the purchase price and the loan: there are also the purchase-related costs – depending on the property, transfer tax (ITP) or, for new builds, VAT (IVA) plus stamp duty (AJD), plus notary, land registry, gestoría (the administrative agency specialising in property transactions that handles formalities and dealings with the authorities for you) and lawyer. The calculator above shows this item as an estimate, based on the same standard assumptions as in the purchase-related costs calculator – there you can adjust the individual items in detail.

What the law guarantees you

Ley 5/2019 (Ley reguladora de los contratos de crédito inmobiliario, the Spanish mortgage credit law) gives you as a buyer three specific guarantees:

A cooling-off period before signing. The FEIN and the FiAE (Ficha de Advertencias Estandarizadas, the information sheet with standardised warnings about the key clauses) must be provided to you at least 10 days before signing the contract. During this time, the notary (notario) advises you free of charge on the terms of your loan – make use of this appointment, it is not a mere formality.

Protection against termination in the event of payment default. The bank may not declare the entire loan due simply because of the first missed instalment. In the first half of the term, the outstanding instalments must reach at least 3% of the originally agreed capital – the same threshold is also considered met if 12 monthly instalments have remained unpaid; the monthly instalments are therefore not an additional hurdle, but a statutory deemed-fulfilment for the same criterion. In the second half of the term, the thresholds rise to 7% or 15 instalments. In both cases, the reference figure is always the originally agreed capital, not your current outstanding balance. And even once the threshold is reached, the bank may only terminate the contract after it has issued you with an unsuccessful reminder with at least one month's notice.

Default interest is tied to your own contractual interest rate. Article 25 of Ley 5/2019 fixes the default interest rate firmly to the agreed borrowing rate of your loan; any deviating agreement in the contract is invalid. So the bank cannot add a freely negotiated penalty rate on top.

Common misconceptions

• TAE and TIN get mixed up. The TAE is the effective interest rate including additional costs and is almost always higher than the TIN, which is used to calculate the monthly instalment. Compare offers using the TAE, but calculate using the TIN.
• "The bank will finance it somehow." How much a bank finances is determined by the bank itself – without a solid equity plan in advance, there's a high risk that the financing commitment will later turn out lower than the purchase price minus your planned equity.
• The purchase-related additional costs are forgotten. Taxes, notary, land registry, gestoría and lawyer come on top of the purchase price minus the loan – anyone who only sets aside the difference ends up with a shortfall.
• Early repayment is assumed to always be free of charge. Whether and under what conditions you can make unscheduled repayments is governed by your contract – the law caps any possible compensation but does not prohibit it.
• A variable rate is assumed to stay as it is today. Over a long mortgage term, the Euríbor has historically moved in both directions several times. Anyone financing with a variable rate should also calculate the instalment at a higher index level – that's exactly why the Euríbor value in the calculator above can be freely adjusted.

Related calculators

The monthly instalment is only one part of the purchase calculation. For a complete overview of the one-off costs relating to taxes, notary and land registry, it's worth taking a look at our two other calculators.

Purchase-related additional costs in Mallorca – the complete overview of taxes, notary, land registry, gestoría and lawyer. Notary and land registry costs – in detail, including the fees for the nota simple, the land registry extract that confirms before signing that the property is free of third-party encumbrances.