This month, we’re looking at why Galicia, Spain’s beautiful green region, attracts more locals and foreigners to buy property. With prices rising per square meter in 2024, we’ll explore what’s behind the trend.

Missed our 2024 learnings about property investment in Spain? Catch up with our last digest.

Read time: 3 minutes

Galicia: Spain’s green gem with favorable environmental conditions

Extreme weather conditions in Spain, such as heatwaves and floods, have highlighted the growing importance of sustainable design and construction. These challenges may also shift interest toward Spanish regions that are better protected against such conditions.

In this context, due to its environmental characteristics, Galicia stands out as a potential climatic refuge. Known for its lush, green landscapes and forests, Galicia leverages its natural abundance to become a climate action leader in Spain.

Unlike Spain’s more popular coastal areas, Galicia offers mild temperatures year-round. This also comes with higher rainfall throughout the year – a tradeoff for its green and serene environment.

2024 showed a strong property market in Galicia

Galicia's appreciation for environmental conditions and affordable property prices make it an attractive investment destination.

Boasting the longest coastline in Spain, Galicia also offers convenient access to other parts of Spain and Portugal, making it easy to travel between the two countries.

In the first half of 2024, property prices in Galicia increased by 15.3%.

By October, the average price per square meter was €1,321, with Pontevedra being the most expensive (€1,626) and Ourense the cheapest (€1,001).

"We have noticed a significant increase in demand for homes from international buyers, from other parts of Spain and also from locals looking for a second home here. Buyers prefer properties close to the coast, but no further inland than 20 kilometers, striking the perfect balance between rural surroundings and being close to the sea" explains Rafael Rosendo, director of Lucas Fox in Galicia.

A hidden gem for luxury homebuyers

Foreigners dominate the luxury home market in Galicia, accounting for 72% of purchases, compared to 28% from national buyers, according to Lucas Fox agency. The southern part of the region, particularly around Pontevedra and Vigo, is especially sought after.

Traditional Galician-style properties are highly popular due to their spacious layouts and large plots that offer privacy. Prices for these homes range between €400,000 and €800,000.

There is also growing interest in country houses, though many require refurbishment. Renovating these properties can add significant value, whether for personal use or flipping. However, well-preserved lands often come with restrictions on construction. If you plan to renovate an older building, be sure to check local planning regulations first.

What will happen to interest rates in Spain in 2025?

Galicia’s growing popularity among property buyers might accelerate further with lower interest rates.

CaixaBank expects the ECB to cut rates in 2025, reducing borrowing costs and making Spanish mortgages more attractive. For regions like Galicia, this could mean even more interest from both local and international buyers.

Currently at 3.5%, CaixaBank estimates that the Eurozone interest rate equilibrium will settle between 2% and 2.25%. The ECB reducing rates will directly impact the housing market by increasing demand, transactions, and property prices.

If lower rates align with your plans, now might be the perfect time to prepare your budget. Tools like Homevest can help you estimate your borrowing capacity and closing costs, ensuring you’re ready to take advantage of favorable conditions.

If you’ve found what we wrote about interesting and want to read new topics, hit reply. We’d like to hear from you.

PS. Here are other ways we can help if you found this valuable:

• Read our blog for insights about Spanish mortgages for non-residents.

• Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

• Find your right mortgage by signing up for a fast and easy process.

For our last newsletter of the year, let’s look at what happened with property investment in Spain in 2024. We’ll share what we’ve learned, what’s next, and where you might want to invest when you’re ready.

Before we dive in, if you’d like to catch up on some of our other posts, check these out:

• Property flipping in Spain: a smart move or risky gamble?

• What matters most when searching for a property in Spain?

• Madrid, one of the best cities in the world to call home

• From visitor to investor: buying property in Malaga, Spain

Read time: 6 minutes

Despite all the challenges in the Eurozone, Spain’s real estate market has been holding strong, with property prices up by 5.71% this year.

Prices per square meter have been steadily rising, showing the overall trend.

The Balearic Islands, Canary Islands, and Valencia have seen the biggest price hikes, which makes sense—they’re perfect getaways from busy cities. Whether you’re thinking of a holiday home for yourself or a place to rent out, these spots will probably stay popular in 2025 too.

Just a heads-up, though—if you’re planning to turn your property into an Airbnb, it might be tricky in some places. Valencia, for example, has stopped issuing new tourist rental licenses in the center for at least a year.

On the other hand, Galicia is becoming a popular place to buy property in Spain. The region saw a 15.3% increase in price per square meter in the first half of 2024, showing a strong market.

"Galicia is being increasingly valued for its environmental conditions. We have noticed a significant increase in demand for homes from international buyers, from other parts of Spain and also from locals looking for a second home here," explains Rafael Rosendo, director of Lucas Fox in Galicia.

Can you boost your investment with a mortgage?

A mortgage can help you keep cash available for other projects while building long-term wealth. Plus, you can get tax deductions on interest payments and reduce risk by diversifying your investments.

If you find a good mortgage deal, this strategy can really help your finances grow over time.

We’ve made a budget estimation tool that shows you what you can afford and the maximum loan you could get from banks.

We know your time is valuable, so we only ask for a few simple details to make the process quick and easy.

Our goal is to give you a clearer picture of your options, so you can see your down payment and price range — helping you get ready for your property journey.

Estimate your budget

6 places to invest in a property in Spain

Spain is full of amazing investment opportunities, especially in areas with rising rental demand like coastal regions and city centers.

Let’s explore 6 great places to invest in, offering strong financial returns and a fantastic lifestyle.

We’ll take a look at the highest and lowest property prices in each area, plus some pros and cons of buying there. All data is from October 2024, sourced from indomio.es.

#1. Barcelona

The priciest homes in Barcelona were in the Sarrià-Sant Gervasi area, going for about 5,582 EUR/m².

On the other hand, you could find the most affordable homes in Nou Barris, with prices around 2,522 EUR/m².

Pros and cons of buying a property in Barcelona

⊕ the cost of living in Barcelona is lower than in places like Germany, the UK, or the US

⊕ there’s a big expat community, so renting out your place year-round is a great option

⊖ property prices in Barcelona are among the highest in Spain

⊖ Barcelona no longer issues tourist licenses, so you can’t rent your place to tourists for short stays unless it already has a license

✈️ Barcelona is easily accessible from the UK and Germany with daily flights. Big US cities like New York and Los Angeles also have frequent flights to Barcelona.

#2. Madrid

Properties in the Salamanca area had the highest prices, averaging 8,180 EUR/m², while Villaverde was much more affordable, with prices around 2,133 EUR/m².

Pros and cons of investing in property in Madrid

⊕ foreigners can buy property in Madrid, following a simple legal process, just like in other parts of Spain

⊕ the price per m² for an apartment in Madrid can be up to 65% cheaper than in London, depending on its location inside or outside the city center

⊖ multiple taxes related to property ownership

⊖ renting out your property subjects you to a non-resident income tax, which ranges from 19% to 24%

✈️ There are many flights from the UK, particularly from London to Madrid, available through various airline options—the same in Germany.

#3. Tenerife (Canary Islands)

The highest property prices in Santa Cruz de Tenerife were in the Centro-Ifara area, with an average of 2,772 EUR/m².

On the other hand, the Suroeste area had the most affordable prices, averaging 1,565 EUR/m².

Pros and cons of buying a property in Tenerife

⊕ property prices are more affordable compared to Madrid or Barcelona

⊕ Tenerife is a popular vacation spot, so there’s a great opportunity to rent out your property

⊕ property owners can enjoy tax benefits, especially on rental income

⊖ rental income can be inconsistent due to seasonal changes in tourist arrivals

⊖ insurance for properties, especially near the coast, might be higher because of risks like flooding or storm damage

✈️ Tenerife is a popular vacation spot for people from the UK, with lots of airlines offering both direct and connecting flights, including budget-friendly ones.

#4. Mallorca (Balearic Islands)

The average asking price for homes was 5,052 EUR/m², which is a 22.47% increase from October 2023, when it was 4,125 EUR/m².

Pros and cons of buying a holiday home in Mallorca

⊕ properties in Mallorca usually increase in value, making it a good investment

⊕ the cost of living is generally lower than in the UK

⊕ high rental income potential

⊖ Mallorca’s popularity has pushed property prices and transaction costs up, so the initial investment can be pretty high

✈️ Mallorca is easy to get to from major European cities, with regular flights, so it’s convenient for property owners to visit.

#5. Alicante

In the province of Alicante, Teulada had the highest asking prices, at 4,070 EUR/m², while Almudaina had the lowest, with prices around 279 EUR/m².

Pros and cons of buying a holiday home in Alicante

⊕ lots of UK expats, so plenty of social activities for English speakers

⊕ well-connected with its international airport and high-speed train services

⊕ beautiful sandy beaches

⊖ more expensive than other coastal areas in Spain

⊖ the rental market can be tough, especially in the high season, with many holiday homes and rental properties available

#6. Galicia

The highest asking price for properties in Galicia was in the province of Pontevedra, at €1,626/m².

In contrast, the lowest price was in Ourense, with an average of €1,001/m².

Pros and cons of buying a property in Galicia

⊕ traditional Galician-style properties have large plots, ensuring privacy

⊕ easy access to other parts of Spain and Portugal, making travel between the two countries convenient

⊖ the mild climate may not appeal to everyone

What other cities or trends do you want to explore in 2025?

Let us know, and we’ll cover them in our upcoming editions!

PS. If you found this valuable, here are other ways we can help:

• Read our blog for insights about Spanish mortgages for non-residents.

• Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

• Find your right mortgage by signing up for a fast and easy process.

In this month’s newsletter, we look at property flipping in Spain and why it could be a good investment.

We’ll help you make the most of your property journey in Spain, from figuring out what you can afford and setting a budget to finding the best strategies for you.

Read time: 6 minutes

Is property flipping a smart move? 

Property flipping starts with buying a property that needs work, often in popular areas, where renovations can increase its value.

While it needs a big initial investment, the potential for high profits makes it attractive.

Why it’s worth considering?

Flipping can be a good option if you’re looking for a creative, hands-on investment that give faster returns than traditional real estate. It helps diversify your investments and, if done carefully, can lead to good profits in a short time. 

Fixing up undervalued properties also helps improve the area, increasing local property values and making the community more appealing.

Flipping can make you money, but it also has risks. 

Unexpected renovation costs, changes in the market, and possible delays in selling can affect your profits. Having a realistic budget, a clear renovation plan, and knowing the local market can make a big difference.

Before planning renovations, let’s first look at your financing options.

How much can you borrow for a Spanish mortgage?

Knowing how much you can borrow to finance a property is the first step. 

Several factors play a role in determining your financing options, including the loan-to-value (LTV) ratio, debt-to-income (DTI) ratio, residency status, income currency, and property type. 

Non-residents typically qualify for an LTV of up to 70%, with a DTI ratio usually capped at 30%, although some lenders may go up to 40%.

Non-EUR-denominated incomes face stricter conditions, but earners in GBP and USD may be offered terms similar to those for Euro income.

Property type and location also impact loan amounts, with urban properties sometimes qualifying for higher financing.

Homevest can give you a clear estimate of how much you can borrow from Spanish banks, helping you set a realistic budget for your property search.

Whether you’re applying alone or with a co-applicant, Homevest makes it easy to understand your financing options, so you’re ready to move forward with your investment.

Calculate your budget

What strategies can help you get the most from your property journey?

Finding a property to renovate can be exciting but also challenging.

From choosing the right city and neighborhood to managing renovation costs and marketing your flipped property, each step needs careful planning.

While Barcelona and Madrid are often crowded due to high demand from both residents and visitors, they are still good places to invest. Malaga and Alicante, on the other hand, offer a great lifestyle, beautiful coastline, and easy access to major airports.

Start by setting a realistic budget and work with experts to best use your time and money.

Affordable renovations that add real value

Renovating kitchens and bathrooms, and making the property more energy-efficient, can bring a good return on investment.

These improvements raise the property’s value and attract buyers looking for modern, eco-friendly homes.

Recommended price range for first-time flippers

If you're new to flipping, consider properties priced between €100,000 and €200,000. This range usually keeps renovation costs manageable while still offering the chance for good profits.

Look for up-and-coming neighborhoods, which often have great potential for price increases. For example, Madrid Centro has a strong rental market.

As Oana Buda, a real estate personal shopper in Madrid, explains, “Madrid still offers properties at more affordable prices in areas with high demand. Many of these properties may need updates and renovations, which creates opportunities to add value. The best part is that the demand for rental properties is at an all-time high, with many people seeking a European lifestyle. Madrid might be the best option among them all.”

Marketing strategies for a flipped property

Focus on the property’s unique features and recent improvements. A good photo can say a lot, so make sure to show off the property visually.

Work with professionals like photographers and local real estate agents, and use social media to reach more people and sell faster.

Thanks for being here, and we’ll see you next month. 

PS. If you found this valuable, here are other ways we can help:

• Read our blog for insights about Spanish mortgages for non-residents. 

• Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

• Find your right mortgage by signing up for a fast and easy process.

We’ve also included a short survey to learn about your preferences when selecting a real estate agent. After all, finding the right agent can make all the difference, especially when buying property abroad.

We’d love to hear your thoughts—feel free to share your preferences whenever you want.

Read time: 5 minutes

Where do you search for your property?

Imagine you're ready to find your dream home in Spain. You’ve decided on the perfect location, but the next step is crucial—where do you search? 

Choosing the right platform can make the difference between a smooth process and unnecessary headaches.

Many people start with Idealista, Spain’s most popular real estate portal. Despite its popularity, Idealista has received poor reviews on TrustPilot, with users reporting a rise in scams. If you decide to use it, proceed carefully and do your homework.

There are other options as well. Fotocasa, Kyero, and Rightmove are solid alternatives. If your search is more specific, like finding a seaside home, consider specialized platforms like Met et Demers.

If you prefer a more personalized approach, a real estate agent can guide you through the process and provide valuable insights into local areas, rules, and regulations.

How do you choose your real estate agent?

Finding your dream home in Spain is exciting, but navigating the process can be challenging. A skilled real estate agent who understands your goals can make all the difference, guiding you through important decisions with confidence.

Whether you're looking for exclusive listings or need help with legal and mortgage details, the right agent can save you time and stress. If you're new to the area or don’t have time to explore many options, having a trusted agent becomes even more important.

To make the search easier, we’ve curated a list of five real estate agencies in Spain that work with non-residents. While our list is subjective, we picked these agencies based on their focus on premium properties, prime locations, and solid reputations.

Our picks for 5 real estate agencies in Spain

• Engel & Völkers specializes in luxury properties in prime regions like Valencia and the Balearic Islands. They offer property management services, but with few listings below €150,000, they may not be ideal for budget buyers. 

• Kyero connects buyers with a network of over 10,000 agents, helping more than 50,000 people find properties. One of the key features of Kyero is the ability for users to report issues with listings or agents. While they provide a large network of agents and detailed information for each property, the service quality can vary due to working with independent agents.

• Lucas Fox operates in 30 locations and offers luxury listings starting at €200,000, including exclusive listings. Some buyers praise their service, while others mention high fees, especially in Barcelona. Their focus on luxury properties may not suit those looking for more affordable options, and service quality can vary across agents and offices.

• Remax Spain, a global real estate agency with over 30,000 agents across Europe, has been named Consumer Choice in Spain for seven consecutive years. Their website includes a map feature that provides detailed agent information such as contact details and certifications. While they offer a wide selection, their corporate structure may feel less personalized.

• CaseSpania is a small real estate company focused on the Costa del Sol and Costa Brava, offering hands-on service with legal assistance and property management. While their portfolio includes over 300 properties in popular areas like Estepona, Marbella, and Alicante, their selection is smaller compared to larger agencies.

There are plenty of options when choosing a real estate agency.

You could opt for a smaller, more personalized agency or a well-known name in the market. Some buyers even decide to hire a personal shopper—someone who evaluates each property’s pros and cons and handles price negotiations.

Clickalia, for example, offers personal shopper services, assisting with market research, property visits, contract reviews, and property registration.

The choice is yours, but creating a checklist of your needs can help simplify the decision, especially if you’re looking for extra services beyond the basics.

Let’s talk: where do you need the most support in your property-buying journey?

Buying property doesn’t have to be overwhelming. Whether you go solo or get expert help, with the right strategy, you’ll know when you’ve found the perfect place.

We’re here to learn from you. 

What matters most when choosing a real estate agent, and what challenges do you need to overcome? 

Share your thoughts in our three-minute survey and help us create a better experience for you.

Make your voice heard

Thanks for being here, and we’ll see you next month.

PS. If you found this valuable, here are other ways we can help:

1. Read our blog for insights about Spanish mortgages for non-residents. 

2. Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

3. Find your right mortgage by signing up for a fast and easy process.

In this month’s newsletter, we explore which is more beneficial when applying for a mortgage in Spain: going directly to the bank or using a broker. 

Understanding the differences between these two approaches can help you avoid missing out on a good offer. 

We spoke with Nora Aparicio from Mortgage in Spain.es to gain insights.

Read time: 4 minutes

Contacting the bank directly might seem straightforward, but having someone handle the process can be more advantageous, especially when unfamiliar with local regulations and the language.

Using a mortgage broker means fewer bank visits while receiving multiple offers from various lenders.

Banks only offer their products, while brokers compare different options and secure the best terms. 

If you go directly to a bank, it can be harder for a broker to assist later since banks typically accept only one mortgage application per client. If you are already registered with a bank through another broker, some brokers won’t submit another application for you.

Working with an exclusive broker from the start might be a good solution if you’re looking for a smooth application process.

Broker vs bank services: insights from Nora Aparicio, Mortgage in Spain.es 

Nora Aparicio is the CEO and Founder of Mortgage in Spain.es. After spending almost a decade in the banking industry, she leveraged her extensive knowledge to start her Spanish brokerage. Her background helps her negotiate more effectively with banks, securing better terms for her customers.

We asked Nora to explain the differences between applying for a mortgage in Spain directly through a bank versus using a broker.

How is working in a bank different from working as a mortgage broker?

Working in a bank and being a mortgage broker are fundamentally different roles. 

At a bank, I was limited to offering only the bank’s mortgage products, restricting my ability to tailor solutions to individual client needs. 

As a mortgage broker, I have access to numerous products from various lenders. This flexibility allows me to provide personalized solutions, ensuring my clients get the best possible terms and rates. 

How does your experience working at a bank influence your approach to brokering mortgages?

My experience in the banking industry has given me a deep understanding of internal processes and lending policies. This background helps me anticipate potential issues and navigate the mortgage application process more efficiently. 

Leveraging this insider knowledge, I can communicate and negotiate effectively with banks, ultimately securing better terms for my clients. 

What services does a broker provide that banks usually don’t?

Customers who choose a mortgage broker can benefit from services that banks typically do not offer:

1. Personalized advice and mortgage recommendations based on each client’s financial situation 

2. Access to multiple lenders, allowing for comparison and selection from a wide range of options 

3. Comprehensive process management, from document collection and application submission to follow-up until the loan is closed

4. Continued support, available to customers throughout the entire process, even outside standard business hours

What are the main advantages of using a mortgage broker instead of contacting the bank directly?

You can save time and effort because brokers compare multiple offers and handle all the necessary paperwork for you. Unlike bank representatives, mortgage brokers offer more flexibility and availability to address questions and concerns. 

Using a mortgage broker also means receiving expert and personalized guidance tailored to your specific needs, as well as access to better interest rates, terms, and conditions.

What makes Mortgage in Spain brokerage competitive in the international buyers market?

Mortgage in Spain.es stands out in the international buyers market due to our extensive experience and knowledge of the specific requirements for non-resident buyers. We offer:

1. Access to a broad range of mortgage products from multiple lenders, enabling us to compare options and secure the best terms and rates for our clients  

2. Multilingual services in English, French, Dutch and Spanish

3. Personalized service based on each client’s financial situation 

4. Comprehensive process management, handling all aspects of the mortgage application process

5. Knowledge of international fiscal regulations, facilitating the provision of necessary economic information to banks

6. Flexibility and availability to support our clients whenever they need it

7. Streamlined communication, acting as your single point of contact with various lenders. 

If you had to give just one piece of advice to non-resident buyers, what would you say to help them make the most out of their mortgage application?

Work with a mortgage broker who specializes in the Spanish market and has experience with international clients. 

This collaboration will give you access to a broader range of mortgage options, tailored support, and expert insights into local regulations and procedures. Such a partnership ensures a smoother and more successful mortgage application process.

What are the mortgage rates in Spain for non-residents?

Mortgage rates can vary depending on the type of property you buy, its value, and the size of your deposit. 

Similarly, the terms you receive will be tailored to your specific situation, so always consider your unique circumstances when evaluating mortgage options.

As a starting point, the average interest rate in Spain dropped to 4.72% in May, down from 4.91% at the start of the year.

See how much you can afford before taking your mortgage process to the next level.

Estimate your budget

If you’ve found what we wrote about interesting and want to read new topics, hit reply or share in the comments. We’d like to hear from you.

Thanks for being here, and we’ll see you next month.

PS. If you found this valuable, here are other ways we can help:

1. Read our blog for insights about Spanish mortgages for non-residents. 

2. Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

3. Find your right mortgage by signing up for a fast and easy process.  

1. The property market in Madrid

2. Best places to buy a property in Madrid

3. What makes a great non-resident mortgage candidate: insights from Natalia Dominguez, UCI

4. Mortgage rates in Spain for non-residents

Read time: 6 minutes

The sun and the dreamy sea always come to mind when thinking about Spain. Although Madrid doesn't have access to the Mediterranean, it compensates by being one of Europe's greenest cities.

Monocle’s annual ranking of the world’s 20 most liveable cities places Madrid in the top 5. The ranking evaluates how well the city has performed over the last 12 months and compares life expectancy, highlighting that quality of life also means quantity.

Add to the list that the cost of living in Madrid is more affordable than in other European cities like London, Paris, or Amsterdam. This affordability extends to property prices, making Madrid one of Spain’s top cities for foreign buyers.

What’s the property market in Madrid?

Madrid, a city that mixes business and leisure, constantly demands homes and commercial spaces.

As of June 2024, the average price for residential properties was €4,729 per m², marking a 20.24% rise from June 2023's €3,933 per m².

“Madrid still offers properties at more affordable prices in areas with high demand. Although most of these properties need updates and renovations, this represents the value one can add. The best part is that the demand for rental properties is at an all-time high, with so many people looking for a European lifestyle. Madrid might be the best option among them all”, says Oana Buda, a real estate personal shopper in Madrid.

Best places to buy a property in Madrid

There are over 20 districts to choose from—some are more expensive than others, some closer to the parks or museums. The city center, for instance, is ideal for those seeking convenient transport, job options, and a vibrant expat community. 

Salamanca: Madrid's premium area 

Average price per m²: €6,698

As one of the city's safest neighborhoods, Salamanca has the highest property prices and attracts affluent residents. The area is renowned for its elegant apartments and townhouses, many of which are housed within historic buildings.

Chamberi: residential atmosphere near the center

Average price per m²: €6,528

Despite its central location, Chamberi is a top choice for its safety, educational institutions, and serene ambiance. This neighborhood is popular with professionals, families, and retirees, offering modern to historic properties.

Villaverde: more budget-friendly options

Average price per m²: €2,143

Villaverde is a neighborhood known for its affordable prices due to its industrial history and location. Its appeal is growing, fueled by new developments and improved transportation links. The neighborhood predominantly features apartments, ranging from older buildings to new constructions.

Retiro: known for peacefulness and greenery

Average price per m²: €5,753

Retiro is the best neighborhood for those with mid and high-range incomes who want to live close to the city and have easy access to the park.

Known for housing one of the city's largest parks and numerous galleries and museums, Retiro is in high demand for its spacious apartments and homes.

“As you can see from the variety of prices and neighborhoods, Madrid has something to offer everyone. In the luxury market, you can find spectacular apartments and houses in beautiful settings. As an investor, you can add value by renovating, reselling, or renting at top market prices while holding for the constantly growing real estate market. This segment has been growing exponentially over the past few years, with significant overseas capital making its way to Spain”, explains Oana Buda. 

While buying a property with cash might be quicker, a mortgage frees up capital for other investments and offers potential tax benefits from interest deductions.

For a quick estimate of how much you can borrow based on your financial profile, check out Homevest. Discover your borrowing capacity before taking your mortgage process to the next level.

Estimate your budget

What makes a great non-resident mortgage candidate: insights from Natalia Dominguez, UCI

Natalia Dominguez is the International Buyer’s Manager at UCI (Unión de Créditos Inmobiliarios). She has extensive experience in non-resident mortgages and shares valuable recommendations for applicants interested in securing financing in Spain, starting with UCI's expectations for a great mortgage candidate.

Natalia, you’ve seen hundreds of mortgage applications and customer profiles. Can you please tell us what makes a great candidate? 

A great candidate for a mortgage typically has a stable and consistent income, and low debt in their country of origin.

One of the common mistakes when applying for a mortgage is not checking your credit rating in your own country first. Your credit rating is important for mortgage eligibility and is based on your credit history. 

Depending on your nationality, it is recommended that you check your credit score beforehand. This way, you'll avoid unpleasant surprises later on and better understand your financial situation, allowing you to make a more informed decision.

What are the non-negotiable criteria for a non-resident mortgage in Spain?

The personal contribution, or down payment, must be higher for non-residents. This is indispensable when applying for a mortgage in Spain.

Another aspect often overlooked is the origination fee and taxes, which typically account for about 10% of the total project cost. You may spend more than anticipated if you forget to include these in your calculations.

What makes your bank competitive in the international buyers market? 

Our commitment is to help you realize your dreams in a safe and responsible manner. At UCI, our highly specialized team supports clients from the beginning of their search.

We offer unique products, such as purchase and renovation loans, allowing clients to buy and renovate properties simultaneously with a single loan.

We provide pre-approvals and offer the flexibility of a risk department that reviews each transaction, fully understanding complex cases. 

If you had to give just one piece of advice to non-resident buyers, what would you say to help them make the most out of their mortgage application?

Approving a non-resident transaction is a complex process that starts once all the necessary information is available to the bank. I recommend being quick and timely in providing documentation and using a service like Homevest.

Mortgage rates in Spain for non-residents

The average interest rate in Spain was 4.72% two months ago, continuing its decline from 4.91% at the beginning of the year.

Given the minimal month-to-month changes, we have decided to update our interest rates quarterly. This approach aims to provide greater accuracy and transparency for our customers when receiving mortgage offers.

Always remember that mortgage rates can vary depending on the type of property you buy, its value, and the size of your deposit.

If you’ve found what we wrote about interesting and want to read new topics, hit reply. We’d like to hear from you.

Thanks for being here, and we’ll see you next month.

PS. Here are other ways we can help:

1. Read our blog for insights about Spanish mortgages for non-residents. 

2. Estimate your budget to understand how much you can afford before taking your mortgage process to the next level.

3. Find your right mortgage by signing up for a fast and easy process. 

Homevest is a digital platform that helps non-residents access the best mortgage deals in Spain. The platform centralizes the customer's cross-border house-buying journey into one place, allowing them to communicate efficiently with all parties involved and easily track their progress.

Now, let's look at how mortgage rates evolved over the past month.

Fixed-rate offers have been very competitive for non-residents in May

A fixed-rate mortgage might be ideal if you value the predictability of fixed monthly payments and are looking for the lowest available rate. The best average mortgage rate in our dataset for May was 2.80%, a slight decrease from April's rate of 2.98%. 

This rate was for a fixed mortgage from Sabadell, on a property in Sevilla, with a 70% LTV ratio, offered to a Spanish citizen living in The Netherlands. The term of the mortgage offer was 25 years.

The average interest rate in Spain was 4.72% in May, continuing to decline from 4.91% at the beginning of the year. Banks are making more competitive offers, and the average wait time was 3 days, a significant improvement compared to the previous month.

The mortgage rate can vary depending on the type of property you buy, its value, and how much deposit you give. Take your time and look at all available options. 

Explore your mortgage options

Valencia joins other Spanish cities in suspending new tourist apartment licenses

Last month, Valencia suspended new tourist apartment licenses for one year, with some exceptions. 

The suspension applies within Ciutat Central and certain areas of the city with a high presence of tourist housing, such as Benimàmet, Carpesa, Poble Nou, La Punta, El Palmar, El Saler, and El Perellonet.

The suspension will not affect license applications that were already in process.

What’s the property market in Valencia?

Valencia is becoming increasingly popular. One of the city’s most compelling propositions for investors is its affordability and high-yield potential.

The cost of living in Valencia is more affordable than in Madrid or Barcelona, and this affordability extends to property prices. It’s no wonder Valencia is becoming one of the Spanish areas with the highest demand among real estate investors.

As of May, the average price for residential properties in Valencia was €2,357 per m².

To put this in perspective, instead of buying a single apartment in Paris, you can afford up to 5 properties in Valencia. The price per m² for an apartment outside the city center is 81% higher in Paris. 

Also, housing prices in Valencia are 25% cheaper than in Malaga. Compared to Barcelona, Valencia's prices are up to 56% cheaper.

Best places to buy a property in Valencia

There are 19 districts in Valencia to choose from—some are more expensive than others, some closer to the seaside. 

Eixample: one of Valencia's most upscale neighborhoods

Average price per m²: €4,000

The area offers modern amenities and a historical charm.

Ciutat Vella: the historic heart of Valencia

Average price per m²: €3,500

You’ll find predominantly resale properties due to the historic nature of the area and the restrictions on altering existing buildings, which limit new developments.

Ruzafa: more budget-friendly options

Average price per m²: €2,800

Modernist buildings, elegant art deco facades, and repurposed industrial spaces.

Cabanyal: beachside location

Average price per m²: €2,100

Most houses in this area are renovated old fishermen’s huts, giving it a unique charm.

Benimaclet: high potential for growth

Average price per m²: €2,100

You can find a mix of apartments and townhouses at affordable prices.

The city attracts many tourists, creating a high demand for apartments.

If you’re not buying to relocate, which would be an investment in your future, you could rent out the property for the long term. Or you could purchase a fixer-upper, renovate it, and sell it for a profit.

Remember to compare all available options, whether it's property prices, investment areas, or mortgage choices.

The first step to understanding which mortgage is a good fit for you is to assess your financial situation—we can work together to optimize your mortgage experience.

Which country has the most competitive rates? Let's explore the options together and find the right answer for your profile. 

Spain's interest rates experienced a slight decrease in April

The average interest rate in Spain was 4.27% in April, a continued decline from 4.91% at the beginning of the year. Banks continue to make more competitive offers, and the average wait time is ten days, a bit longer than the previous month. 

Variable, fixed, and mixed mortgage rates in Spain for non-residents decreased slightly in April.

According to data collected from mortgage offers that Homevest users received last month, Cajasur had a fixed interest rate of 3.65%, making it the most competitive among Spanish banks.

Portugal’s interest rates have decreased for the first time in two years

The average interest rate, currently at 4.64%, reflects this decline from the beginning of 2024. As per the National Statistics Institute, the interest rate on housing has decreased for the first time since March 2022.

This decrease applies equally to both variable and fixed mortgage rates.

In Portugal, mortgage rates are identical for residents and non-residents, potentially making them more attractive to buyers.

“Banks roll out new offers each week. What's best for one client might not suit another. It all comes down to each person's financial situation and needs,” says Reorganiza, Portugal's leading mortgage broker.

Best banks in Spain vs. Portugal

Obtaining a mortgage in Spain as a non-resident means up to 70% financing with a minimum 30% down payment and extra costs. The process is complex, with a 35% debt-to-income ratio limit and additional documentation. 

EU non-resident applicants are eligible for an LTV ratio of 75%-80% when accessing a mortgage in Portugal with foreign income. At the same time, Portuguese citizens living abroad are eligible for an LTV ratio of 85%. The offer includes up to 30-year terms with a debt-to-income cap of 35%.

To help you form an opinion about the offering of the best mortgages in Spain vs. Portugal for non-residents, let's make a brief comparison:

The mortgage choice for your new home is yours, depending on your needs. Both countries offer the potential to generate rental income and are popular tourist destinations worldwide. 

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Malaga checks all these boxes, making property investment here even more attractive for relocation or year-round rental. With plenty of sunshine every season, the city's appeal is undeniable. With more favorable interest rates, transitioning from a visitor to an investor could be the perfect move.

Malaga: a top choice for second homes and digital nomads

According to the National Statistics Institute, from 2011 to 2020, nearly 40% of new homes in Malaga were designed as second residences. It's not just the climate or the laid-back lifestyle that draws people in; it's the overall quality of life that transforms visitors into residents.

With tourism booming, Malaga offers rental opportunities, particularly near beaches and the city center, where rental demand is increasing. Investing in property here provides financial returns and a lifestyle known for its leisurely pace, rich history, and exquisite cuisine.

Why it works?

• It’s well connected by two international airports (Malaga and Gibraltar) that accommodate low-cost and transcontinental flights

• With over 300 days of sunshine per year, stunning beaches, and a wide range of leisure activities, Malaga boosts endorphin levels

• Companies like Google, Vodafone, and Siemens have recognized Malaga’s potential for growth and innovation

• The healthcare system is ranked among the best in the world and adds value to the city’s living standards

• As a touristic hub that draws visitors worldwide, Malaga is a smart choice for rental investment

How much does it cost to buy a property in Malaga?

As in much of Spain, property prices in Malaga are generally more affordable than in many US, UK, or German cities.

As of March 2024, the average property price in Malaga reached €2,841 per square meter, reflecting a 17.98% increase from March 2023.

The Centro area featured the highest prices, at €3,590 per square meter, whereas the San José area offered the most affordable options, with an average price of €1,816 per square meter.

If making Malaga your own, is an exciting thought, don’t forget that a mortgage can extend your purchasing power and make property investment even more accessible.

Average interest rates in March saw a slight drop from February's figures

In March, the average interest rate in Spain continued to drop to 4.25%, a slight reduction from the previous month's 4.27%. This marks a continued decline from 4.91% in January 2024.

Since the beginning of the year, Sabadell has made the most competitive offers. This trend persisted into March when Sabadell presented the best offer among all banks in Spain: 3.25%. 

This was also the best average mortgage rate in our dataset for the month, a slight increase from February's rate of 3.05%. Keeping up with these changes is key to effective negotiation, and that's where Homevest steps in to help you secure the best deal. 

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Variable mortgage rates see a slight decrease in February

When comparing the best interest rate, it’s important to bear in mind that there are three kinds of mortgage products on offer in Spain: variable, mixed, and fixed rates. 

In February, the average interest rate in Spain dropped to 4.27%, a decrease from the previous month's 4.91%. This marks a continued decline from 5.39% in December 2023.

The best variable rate mortgage in February was 5,40%, a slight decrease from January’s 5,46%.

In February, the best fixed-rate mortgages slightly increased to 4.05%, up from 3.96% the previous month.

The mixed-rate mortgages saw an increase, reaching 4.61%. 

*The interest rate data for Spanish mortgages for non-residents and the time to receive an offer are based on anonymized data collected from real mortgage offers that Homevest users have received.

So, how can you secure the best deal on your mortgage in Spain?

Buying a property is very exciting, but it comes with challenges, especially if you're accessing a mortgage in Spain as a non-resident. From language barriers to unfamiliar banking processes, the home-buying journey can become overwhelming. 

But it’s not impossible. In 2023, foreigners acquired over 67,000 houses, making up around 13% of all transactions. Of those, 7% signed a mortgage.

This means lots of people like you did it

Maria from Cajasur, a leading Spanish bank specializing in mortgages for non-residents buying in the south of Spain, offers three key tips to help you secure better mortgage terms. 

Starting her banking career in 2006 at Kutxabank in Marbella, Maria Isabel Morillo is a Deputy Branch Manager at Cajasur, focusing her efforts on services for non-residents. 

Here’s what Maria recommends if you want to get better terms for your mortgage in Spain: 

Remember that having income in a stable currency like the EUR, USD, SEK, or NOK opens up a wider range of mortgage choices. A more volatile currency can limit your options.

Now could be the perfect opportunity to consider buying that holiday home you've been dreaming of.

Fixed-rate offers have been very competitive to non-residents

A fixed-rate mortgage might be ideal if you value the predictability of fixed monthly payments and are looking for the lowest available rate.

In January, we saw a drop in the best average mortgage rate to 2.75% from December's 3.75%.

This rate came from a Sabadell fixed-rate mortgage for a €225,000 property with a 70% LTV, offered to a resident in Croatia. The rate starts at 2.75% for the first year and then goes up to 3.65%. Getting this rate also means taking home and life insurance with Sabadell.

The average interest rate in Spain dropped to 4.91% in January, down from 5.47% in December 2023. Among the standout offers, Sabadell presented the most appealing fixed rate at 2.75%, and Cajasur led with the best variable rate at 5.46%.

Is it worth buying a holiday home in Spain?

While it offers benefits like warm weather, cultural richness, and potential rental income, it also has challenges, such as upkeep costs and property value changes.

In January 2024, there were big differences in house prices across different parts of Spain. In Alicante, the average price was 1,982 EUR for every m². In Barcelona, it was around 3,907 EUR. Málaga had the highest prices at 2,762 EUR. 

However, the most pronounced price variations were witnessed in the Balearic Islands. Formentera showcased soaring prices at 7,837 EUR per m², contrasting with Petra, where prices averaged 1,908 EUR per m².

📌 Whether you've recently started exploring mortgage options or have a specific property in mind, our guide provides insights into the best places to purchase a holiday home in Spain, along with prices and considerations for non-resident property buyers.

📌Choosing between fixed or variable-rate mortgages? Our comparison guide, tailored to current market trends, helps you weigh stability against flexibility to make an informed choice.

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