Hi forum.

I have couple of questions regarding general mortgage conditions in Spanish banks.

First of all I have to admit that it is not very easy to find relevant information on major bank's websites.
I thought that writing email is fine, but they provide weird forms where you have to enter phone number, some kind of a NIF number and things like that. I just wanted to ask couple of very simple things =) Anyway, I managed to send couple of these forms, but maybe you can help me faster.

I do not live in Spain yet, but planning the move. If all goes fine, I will think about permanent home and therefore will take mortgage. Of course, exact interest % and things like that are decided by bank on a private basis.

What I planned to find out is the following (and normally should be regulated by law):

1. Interest consists of Euribor + bank's %.
Will Euribor part be as low as it can be? I was a bit surprised to know from the Google that there were cases where banks "have freezed" Euribor on a higher level despite it fell significantly

2. Can bank change their % of the interest at discretion?

3. Can I make repayments and if yes, how much can it cost?
For example, I take a mortgage for 30 years, so that my monthly payments are quite low. But at the same time if I have some extra money, I gather them once a year and send to the bank to reduce the body of the mortgage step by step.

I bet some forum members have taken mortgages from the Spanish banks and can explain me these specifics.

Thanks you!

I had a mortgage and similar to yourself planned to pay it off early.

My mortgage was with Cajamar and they assessed the interest rate annually I think January it then stayed the same until the following year.

When you pay off parts of the mortgage there is a charge % of loan set at time of taking out the mortgage. This includes if you wish to pay the mortgage off in total which I did. The lady at the bank advised me to pay off most of mortgage but leave say 2 payments to pay that way I would save in the region of 1500 Euros. I followed her advice and did save that amount. I do find with my bank that the staff are very good at advising you.

Just to clarify in my case the mortgage stated that to make a payment as part payment % rate was less than should you make total payment early.

Hi bobd22

Thanks for a quick reply!

Do you remeber what part of the interest changed? If it was Euribor, then it is normal, but if bank's part of the interest, then this is frightening as they can change it as much as they want..

Maybe you also remember, what % was to pay part of the remaining mortgage body? Maybe 0.5%, 1%, 2%? Just to have an overall overview..

Check the level of interest if the mortgage falls into arrears, it can be as high as 25%.

hi, guirijohn! What do you mean by 25%?? 25% from the amount I want to pay extra? That's kinda robbery.

No, I am referring to the situation where the mortgage payments fall into arrears. The is usually a clause that allows the lender to charge a penalty rate of interest. It is a question of reading the small print. Hopefully it would never happen, but it can be a rapidly downward spiral for borrowers who lose their jobs, or who fall ill.

Ah, sorry, now I got the point. Yes, this is also worth checking, but pretty sure that every bank globally has some kind of a penalty for not paying in time.

Yes it was the Euribor bit that changed they assessed that around january and that set it for next 12 months. The actual interest charged was Euriobor plus a % seem to think it was Euribor plus 2 or 2 1/2 %? I do seem to remember it going down as well not always up

I will see if I have the actual papers available later and give you full figures

I have a mortgage with what was once Halifax ==> Lloyds ==> Sabadell. It is based on the MONTHLY Eurobor and not the annual one. The benefits are that if the Eurobor is on a downward trend, then I see the benefit every month of course the opposite is also true.

I currently pay 1.1% (bank bit) plus 0.12% (monthly eurobor rate).

The other benefit which I insisted upon when I took out the mortgage is that I can pay any of the capital off (but no less that 1000e in any one go) without penalty.

Not all mortgages are based on Euribor. Some banks use the official average rate that banks actually charge - this is published every month by the bank of Spain and it is well above Euribor.

Most mortgages have a minimum interest rate so that even if the official rate drops to zero they still charge the minimum rate.

It's an absolute minefield and you may well find it very difficult to get any sort of mortgage at present. I read recently that 93% of all requests for loans are rejected.

Best of luck!

Sorry can't find details I was looking for. As said there are a variety of different mortgages ours was as said Euribor + % set in January and stayed that way untill following january when it may go up or down dependant on Euribor bank percentage stays same, positives and negatives for that as has been mentioned. You could pay off an extra amount min 1000 Euro up to full amount outstanding but there was a small% charge, if it was full amount percentage goes up slightly.
One other point with Spanish mortgage once you have paid it off you have to get the deed changed to remove bank unlike the UK this is not done free of charge costs around 800 - 1200 Euro!

Presumably you can ignore that until you wish to sell the house and do it then or would there be a problem with this?

Not sure on that Fred very possibly but I got it done and out of the way as bank kept mentioning that it should be done.

The price might have gone up by then! I got the deed of cancellation for my mortgage done as soon as we paid it off.