Understanding mortgages
Buying a home is probably the biggest investment of your life. Understanding how mortgages work is essential to making the best decision.
Types of mortgages
Fixed-rate mortgage
- Interest doesn’t change throughout the life of the loan
- Stable and predictable payments
- Ideal for those who want security
Variable-rate mortgage
- Interest varies according to the Euribor
- Payments that can go up or down
- Historically cheaper in the long term
Mixed mortgage
- First years at fixed rate
- Rest of the loan at variable rate
- Combination of security and flexibility
Typical requirements
Banks usually ask for:
- Savings: between 20% and 30% of the price (deposit + expenses)
- Job stability: permanent contract or seniority
- Sufficient income: the payment should not exceed 30-35% of income
- Good credit history: no defaults
Associated costs
In addition to the property price, you need to account for:
- Taxes (ITP or VAT): approximately 10%
- Notary and registry: 1-2%
- Agency: €300-500
- Valuation: €300-400
Negotiation tips
- Compare offers from several banks
- Negotiate the tie-ins (insurance, direct debit salary)
- Review opening and cancellation fees
- Consult an independent mortgage advisor
At Fincas Aguilar & Vilalta we work with several banks and can help you find the best mortgage for you.