The best bank in Spain to apply for a mortgage in 2023.

25 October, 2023 | M Aparicio

If you are in the process of looking for a mortgage in Spain, you are likely immersed in a sea of doubts, concerns, and uncertainties.

It’s very likely that one of the most common questions on your mind is: Which is the best bank in Spain to apply for a mortgage in 2023? Well, from Hipotecas Plus, we are going to be very clear and transparent and provide you with the best information we have.

Choosing the right bank is of utmost importance, as signing a mortgage is likely the largest and most significant investment you will make in your life, especially if it’s for a property in a country that isn’t your own and with which you’re not familiar.

Current economic context marked by high inflation and high interest rates

In 2023, we find ourselves in a dynamic economic context. There is high inflation (excessive price increase in the consumer basket) which has led the European Central Bank (ECB) to raise interest rates in a very accelerated and unprecedented manner. We are navigating uncharted economic waters, as in just over a year we have gone from having interest rates from 0% to 4.5%.

This sharp increase in interest rates has direct and clear repercussions on the mortgages offered by banks.

To put it simply… interest rates are essentially the cost of money, and they clearly dictate the interest rate at which loans will be granted to consumers by financial institutions. This applies to both personal and mortgage loans.

The higher the cost of money (interest rates), the higher the interest rate will be for loans of any kind, including, of course, mortgages.

So, with high interest rates, it becomes more challenging to find attractive mortgage offers. However, we will provide you with information about the most appealing ones, and you will surely find one that might be suitable for you.

Highlighted Banks for Mortgages in 2023.

Now, we’re going to show you the best mortgage offers we’ve found, both for fixed-rate mortgages, as well as mixed and variable ones.

We’ll differentiate between discounted mortgages and non-discounted mortgages. Discounted mortgages are those where banks offer you a lower interest rate in exchange for you signing up for certain financial products with their institution.

These products might include life insurance, home insurance, payment protection insurance, direct deposit of a paycheck, pension, or unemployment benefits, having a minimum spend on a debit or credit card, and so on.

Let’s take a look at some of the standout banks in the mortgage market for 2023 for fixed-rate mortgages:

1. Santander Mortgage: They offer a discounted fixed-rate mortgage with an APR of 3.39%, and a non-discounted rate of 4.10%.
2. BBVA Mortgage: An APR of 3.92% for a discounted mortgage, and 4.65% without the discount.
3. Openbank Mortgage: A discounted rate of 3.60% and a non-discounted rate of 3.82%.

The best financial institutions for mixed-rate mortgages are:

1. Openbank Mixed Mortgage: 10 years fixed at 2.74% APR as a discounted mortgage and 3.24% APR without a discount. Afterwards, it changes to Euribor plus 0.55% with a discounted mortgage and Euribor plus a 1.05% spread if we choose a non-discounted mortgage.
2. EVO Mixed Mortgage: 15 years fixed at 2.95% APR in the discounted mode and 3.35% without a discount. The discounted fixed rate then turns variable with Euribor plus 0.75%, and the non-discounted fixed, after 15 years, turns into a variable mortgage with Euribor plus a 1.15% spread.
3. Santander Mixed Mortgage: You have a fixed rate for 9.5 years, at 2.70% APR in the case of a discounted mortgage and 3.80% APR without a discount. After those 9.5 years, the discounted rate changes from fixed to variable with Euribor plus 0.79%, and the non-discounted mortgage becomes variable with Euribor plus a 1.89% spread.

And regarding variable-rate mortgages:

1. EVO Variable Mortgage: at Euribor plus 0.48% for discounted mortgages and at Euribor plus 0.88% without a discount.
2. Kutxabank Variable Mortgage: at Euribor plus 0.49% for discounted mortgages and at Euribor plus 1.49% without a discount.
3. COINC Variable Mortgage: at Euribor plus 0.75% for discounted mortgages and at Euribor plus 1.15% without a discount.

What should I look for when taking out a mortgage with a bank?

First and foremost, you should opt for the bank that offers you the most attractive and suitable mortgage for your needs. However, you should also not underestimate qualities that financial institutions possess, such as:

1. Competitiveness in Interest Rates: This is essentially an extension of the main feature we just mentioned. In this regard, a fundamental element in choosing the right bank is the proposed interest rate. Banks with competitive rates can result in significant savings over the life of your mortgage. Just imagine how much you can save on a mortgage with a term of 20 – 30 years where the interest rate is a percentage point lower than another! Undoubtedly, a colossal saving.
2. Quality of Customer Service: A mortgage usually means a long-term relationship with the bank, and over such a long time, new needs can arise, such as carrying out a mortgage novation or extension, refinancing, and so on.

The quality of customer service is crucial.

Banks that offer exceptional service make the entire mortgage application process more efficient and less stressful. Additionally, any subsequent questions or renegotiations can also be more easily and swiftly resolved if the quality of the relationship with the customer is optimal.

3. Flexibility in Terms and Deadlines: The terms and conditions of a loan can vary significantly among banks. Finding a bank that provides flexible options is extremely important to ensure they align with your financial needs.
4. Reputation and Financial Stability: Researching the bank’s reputation and financial stability is essential. A bank with a robust reputation in the market is more reliable and secure.

You might think that since you’re only getting a mortgage with a particular bank and won’t be saving with them, their reputation and stability aren’t important. However, you don’t know what situations you might face in the future or what transactions you might need to undertake with them. Therefore, it’s crucial that the bank you choose for your mortgage is solid, trustworthy, and solvent.

Advantages of Having a Mortgage Broker

We have informed you about the best mortgages currently available in the market. But even these terms can be substantially better if you hire the services of a mortgage broker. We, Hipotecas Plus, are a team of experts by your side until you secure the best mortgage.

With Hipotecas Plus, you can enjoy various advantages:

1. Access to a wide range of options: As mortgage brokers, we have access to an extensive network of banks and financial institutions, which means we can offer you various options and compare them according to your needs.
2. Saving time and effort: We handle much of the complicated work, from gathering documents to submitting applications, saving you time, effort, and stressful moments.
3. Negotiation of Rates and Terms: We can negotiate interest rates and terms on your behalf, which could lead to more attractive mortgage offers and consequently benefits for you.
4. Professional assistance and support: Hipotecas Plus has professionals with deep market knowledge who can provide tailored guidance and insight based on your financial situation, needs, possibilities, and desires.

Prepare for your mortgage application to be successful

• Solid Financial Preparation: You need to have good financial health and sufficient savings. If you live and pay your taxes in the European Union, you will need to provide at least 30% of the purchase price + notary fees. If you reside outside the European Union, you will be required to contribute 50% of the purchase price + notary fees in order to secure a good mortgage.

• Thorough Review of the Bank’s Offer: It’s crucial to get accustomed to reviewing documents diligently and to familiarize yourself with mortgage-related terminology.

• Detailed Understanding of Terms and Conditions: It’s essential to prevent any unpleasant surprises down the line. If there are terms and conditions you’re not willing to agree to, inform the bank immediately!

• Collaborative Effort with the Bank, your real estate agent, and, if you choose, your mortgage broker.

Summary on the Best Bank to Apply for a Mortgage in 2023

Choosing the best bank for your mortgage in 2023 is a crucial decision in the mortgage application process.

You should consider factors such as interest rates, the quality of customer service, the flexibility of terms, and the stability and solvency of the financial institution. We have provided you with the best mortgage offers available in the current market.

Additionally, opting for a mortgage broker, like us at Hipotecas Plus, will bring significant benefits, making the process even more efficient and profitable. You’ll save money, effort, and time.