Choosing between a fixed vs variable mortgage in Spain is one of the most important financial decisions expats face when buying property. It’s not just about interest rates—it’s about risk, predictability, income currency, and how Spanish banks think.

If you’re an expat, non-resident, or foreign buyer, this decision matters even more than it does for locals.

In this guide, we’ll break down Spain fixed rate mortgages, Spain variable rate mortgages, how Euribor affects mortgages, and most importantly which option usually makes the most sense for expats in 2025 and beyond. Learn about how mortgage in Spain works.

No fluff. No sales talk. Just clear explanations so you can decide confidently.

Understanding Mortgage Types in Spain (Quick Overview)

Spanish banks offer four main mortgage structures:

• Fixed-rate mortgage

• Variable-rate mortgage

• Mixed-rate (hybrid) mortgage

• Short-term tracker products (rare for expats)

For expats, the real debate is almost always fixed or variable mortgage Spain—so let’s focus there.

What Is a Fixed Rate Mortgage in Spain?

A Spain fixed rate mortgage means your interest rate stays the same for the entire loan term.

Key Features

• Same monthly payment every month

• Immune to Euribor changes

• Higher starting rate than variable (usually)

• Strong predictability

Spanish fixed mortgages are governed by Spanish mortgage law (Ley Hipotecaria), which caps penalties and enforces transparency.

Pros of Fixed Rate Mortgages in Spain

1. Stability and Peace of Mind

Your payment never changes—ideal if you hate surprises.

2. Protection Against Euribor Volatility

Euribor-linked mortgages can rise fast. Fixed rates shield you completely.

3. Better for Foreign Income

If your income is in GBP, USD, or another currency, fixed payments reduce currency risk Spain mortgage exposure.

4. Popular with Expats

Among mortgages for expats Spain, fixed rates dominate—especially for non-residents.

Cons of Fixed Rate Mortgages in Spain

1. Higher Initial Cost

Spanish fixed mortgage rates are usually higher than variable rates at the start.

2. Early Repayment Penalties

Spain allows penalties, though capped by law:

• Usually 0–2% depending on term

3. Less Flexibility

If rates drop sharply, you don’t benefit unless you refinance.

What Is a Variable Rate Mortgage in Spain?

A Spain variable rate mortgage is tied to Euribor + a margin (diferencial).

Example

• Euribor: 2.5%

• Bank margin: 1.0%

• Total rate: 3.5%

Rates reset every 6 or 12 months.

How Euribor Affects Mortgages in Spain

Euribor is the benchmark interest rate used across Europe.

When Euribor:

• 📈 Goes up → your payment increases

• 📉 Goes down → your payment decreases

This makes Euribor-linked mortgages inherently volatile.

Spanish banks are legally required to explain:

• Worst-case scenarios

• Historical Euribor trends

• Stress-tested payments

Pros of Variable Rate Mortgages in Spain

1. Lower Initial Rates

Variable mortgages often start cheaper.

2. Historically Popular in Spain

Traditionally, Spaniards preferred variable rates—especially during low-rate periods.

3. Lower Early Repayment Costs

Usually cheaper to overpay or exit early.

Cons of Variable Rate Mortgages in Spain

1. Payment Uncertainty

Monthly payments can rise sharply.

2. High Risk for Expats

Foreign income + variable rates = double risk.

3. Stress Test Pressure

Spanish banks apply tough mortgage stress tests Spain, especially for foreigners.

Why Variable Mortgages Are Common in Spain (Historically)

For decades:

• Euribor was very low

• Inflation was stable

• Spanish households accepted interest risk

But post-2022, this culture has shifted dramatically—especially among expats.

Mixed Rate (Hybrid) Mortgages in Spain

A mixed rate mortgage Spain combines both types.

How It Works

• Fixed rate for 3–10 years

• Then switches to variable (Euribor-linked)

This can be a compromise, but:

• Fewer banks offer them to non-residents

• Complexity increases risk

Fixed vs Variable Mortgage Spain: Side-by-Side Comparison

Which Mortgage Is Better for Expats in Spain?

Short Answer

👉 Fixed rate mortgages are usually better for expats.

Why?

• Expats already face:

  • Currency risk

  • Foreign income scrutiny

  • Residency uncertainty

Adding interest rate volatility often makes things worse.

Best Mortgage Type for Non-Residents in Spain

For non-resident mortgage Spain rates, banks typically prefer:

• Fixed rates

• Shorter terms

• Conservative LTVs

Variable mortgages for non-residents exist—but are less common and harder to secure.

How Spanish Banks View Foreign Income

Spanish banks:

• Apply currency haircuts

• Stress-test exchange rate risk

• Prefer predictable payments

This makes Spain fixed rate mortgages more attractive to lenders when income is foreign.

TIN vs TAE Spain: Why It Matters

• TIN (Tipo de Interés Nominal) = base rate

• TAE (Tasa Anual Equivalente) = true cost including fees

Always compare mortgages using TAE, not TIN—especially when cross-selling products are involved.

Cross-Selling Requirements Spain Mortgage

Many Spanish banks offer lower rates if you:

• Open accounts

• Buy insurance

• Use credit cards

• Domicile salary/pension

Expats should calculate the real cost, not just the headline rate.

Mortgage Risk Spain: What Expats Underestimate

Expats often underestimate:

• Long-term rate volatility

• Currency fluctuations

• Refinancing difficulty as non-residents

A “cheap” variable mortgage can become very expensive over time.

Will Spanish Mortgage Rates Go Up in 2025?

No one can predict rates—but:

• Euribor remains volatile

• Inflation uncertainty persists

• Banks price risk conservatively

This uncertainty strengthens the case for fixed rates.

Which Spanish Banks Offer Fixed Rates to Expats?

Most major banks do, including:

• Santander

• BBVA

• CaixaBank

• Sabadell

• International-focused lenders

Terms vary widely—comparison is essential.

Should I Choose Fixed or Variable in Spain? (Decision Framework)

Choose fixed if:

• You’re an expat or non-resident

• Income is foreign currency

• You want certainty

• You plan long-term ownership

Consider variable only if:

• You have high risk tolerance

• Income is euro-based

• You plan to sell quickly

• You understand Euribor deeply

Need clarity on your mortgage options? Speak with a Tharros Brokers expert and get personalised guidance for your situation.

Conclusion

When it comes to fixed vs variable mortgages in Spain, the “best” choice depends on who you are—but for most expats, the answer is clear.

Fixed rate mortgages in Spain offer stability, predictability, and protection against the two biggest expat risks: interest rate volatility and currency exposure.

Variable mortgages can work—but they demand experience, flexibility, and risk tolerance that many expats simply don’t want when buying abroad.

In Spain, boring and predictable often wins.

FAQs: Fixed vs Variable Mortgages in Spain

Should I choose a fixed or variable mortgage in Spain?

Most expats are better off with fixed rates due to stability and currency risk.

What is Euribor and how does it affect my mortgage?

Euribor is the benchmark rate; it directly changes variable mortgage payments.

Are fixed rate mortgages common in Spain?

Yes—especially since recent rate volatility. They’re very popular with expats.

What is the most popular mortgage type among expats?

Fixed-rate mortgages dominate among foreign buyers.

How do foreign income and currencies affect mortgage choice?

Foreign income increases risk, making fixed rates safer and more predictable.