Mortgage rates in Spain – what’s happening in 2025?

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If you're thinking about buying a property in Spain this year whether it's a sunny second home, a smart investment, or a new place to live understanding mortgage rates is key. The good news? 2025 is bringing some positive moves for buyers.

After a few years of rising interest rates, things are finally starting to cool down. Mortgage rates in Spain are now more affordable than they’ve been in a while, and banks are offering more flexible options for both residents and international buyers.

So, what exactly has changed and what should you know before applying for a mortgage?

What's changed in 2025?

Mortgage rates are going down

• Over the past year, Spain's average mortgage rates have been gradually decreasing. In early 2024, fixed mortgage rates were hovering close to 4%. As of July 2025, similar products are being offered at around 2.5% to 3%, and in some cases even lower — a significant improvement.

The European Central Bank has eased up

One key reason for falling mortgage rates is that the European Central Bank (ECB) has cut its key interest rate multiple times over the past year in response to declining inflation. As a result:

• The 12-month Euribor, which influences most variable mortgages in Spain, has dropped to around 2.08% — the lowest level since 2022.

• This makes borrowing more affordable, especially for buyers with variable or mixed-rate mortgages

The current mortgage options?

Spanish banks are offering a range of mortgage types:

Fixed-Rate mortgages

• Offer predictable monthly payments for the life of the loan.

• Current rates: Around 2.5% to 3%, depending on the lender, loan term, and your profile.

Variable-Rate mortgages

• Linked to the Euribor (currently ~2.08%).

• Starting rates: Around 2.6% to 2.8%, potentially lower with strong profiles.

• Best for buyers expecting rates to remain low or fall further.

Mixed-Rate mortgages

• Fixed for the first 5 to 10 years, then switch to a variable rate.

• Becoming increasingly popular as a balanced option.

• Fixed period rates as low as 1.55% to 1.85% (e.g. Ibercaja, Openbank).

What Does This Mean for Buyers?

Greater affordability:

• Lower interest rates mean lower monthly payments, so your overall cost of borrowing is reduced great news if you’re buying in cities like Barcelona, Madrid, Valencia or Marbella.

Good news for international buyers:

• If we look at an average fixed 30 year rate around the world, Spain stands out as one of the more attractive borrowing environments in developed markets, especialyl for international buyers.

  • Spain - 2.5% - 3% (fixed)

  • UK - 4.9% - 5.2%

  • USA - 6.72% - 7.79%

• Spanish banks continue to welcome non-resident buyers. Working with a reputable broker or agency like Lucas Fox can help you access:

  • Competitive rates (often similar to residents)

  • Up to 70% LTV

  • Streamlined approval processes

More negotiating power:

• With banks competing for clients, buyers may be able to negotiate better conditions such as lower fees, higher loan-to-value (LTV) offers, and flexible insurance requirements.