Are you considering buying a second home or moving permanently to the sunny Costa Blanca or the diverse province of Murcia? If so, financing will probably play an important role in your decision.

Mortgage rates, the terms offered by Spanish banks and the amount you need to contribute yourself all help determine what is financially feasible. Changes in interest rates may create opportunities, but it is important to look beyond the interest rate alone.

In this blog, we explain how the Euribor affects your mortgage rate, which mortgage options are available to foreign buyers and which financing conditions and purchase costs you need to take into account. This will help you prepare for buying your home in the Spanish sunshine.

The Euribor: What Does It Mean for Your Spanish Mortgage?

The Euribor is an important European benchmark interest rate and plays a major role in many variable-rate mortgages in Spain. The 12-month Euribor is particularly widely used.

When you take out a variable-rate mortgage, your interest rate generally consists of two components:

• The Euribor: the benchmark interest rate that can change during the term of the mortgage.
• The bank's margin: the fixed percentage the bank adds to the Euribor, in accordance with the terms of your mortgage agreement.

Suppose the Euribor is 2.5% when your mortgage rate is reviewed and your bank applies a margin of 1%. Your mortgage interest rate would then be 3.5%.

If the Euribor rises, your monthly repayments may increase. If it falls, your monthly repayments may decrease when your interest rate is revised.

However, future interest rate movements remain uncertain. Economic developments, inflation and decisions made by the European Central Bank can all influence the interest rate market. It is therefore advisable not to base your property purchase solely on the expectation that interest rates will fall further.

Which Mortgage Type Is Right for Your Spanish Dream?

If you live in the Netherlands or Belgium and want to buy a property in Spain, you may be able to choose from several types of mortgages. The options available depend, among other things, on your income, assets, age, existing financial commitments and the bank's lending criteria.

1. Fixed-Rate Mortgage: Certainty About Your Interest Rate

Would you like to know in advance what to expect financially during the agreed mortgage period? A fixed-rate mortgage may be an attractive option.

When you take out the mortgage, the interest rate is fixed for the agreed period, often for the entire mortgage term. This means your interest rate remains unchanged during that period, making your monthly repayments more predictable, apart from any other costs.

The advantage is clear: you are protected against rising interest rates. On the other hand, you do not automatically benefit if interest rates fall.

The rate actually offered to you depends on your personal circumstances and the bank's terms and conditions.

2. Variable-Rate Mortgage: Moving with the Market

With a variable-rate mortgage, the interest rate is generally calculated by adding an agreed bank margin to the Euribor.

The rate is recalculated at set intervals, for example annually or every six months, in accordance with your mortgage agreement.

If the Euribor falls, your monthly repayments may decrease. If it rises, your repayments may increase.

This type of mortgage may be attractive to buyers who have sufficient financial flexibility to absorb potential interest rate increases. However, it is important to calculate in advance whether the monthly repayments would remain affordable if interest rates turned out to be higher than expected.

3. Mixed Mortgage: Fixed First, Variable Later

A mixed mortgage, known in Spain as a hipoteca mixta, combines a fixed-rate period with a variable-rate period.

During the first few years, you pay a fixed interest rate. Once that period ends, the rate becomes variable and is generally linked to the Euribor plus the agreed bank margin.

This mortgage type may be suitable if you want certainty about your monthly repayments during the initial years and are prepared to accept possible interest rate changes later on.

Pay close attention to the terms: the length of the fixed-rate period, the interest rate during that period and the bank margin that applies afterwards vary from one mortgage offer to another.

The mortgage type that suits you best depends not only on today's interest rates, but also on your financial circumstances and how much certainty you want.

How Much Can You Borrow as a Foreign Buyer in Spain?

One of the first questions when buying a property in Spain is how much you can borrow.

Banks often finance a lower percentage of the property's value for buyers who do not live in Spain than they do for certain residents. For a second home or a purchase by a non-resident, financing of around 60% to 70% is relatively common, but this is not guaranteed. Some banks apply stricter conditions.

The bank will also consider the property's appraised value and the applicant's personal financial circumstances.

Factors taken into account include:

• Your net income and how stable it is.
• Your existing mortgage commitments and other loans.
• Your assets and available savings.
• Your age and the desired mortgage term.
• The purchase price and the property's appraised value.

Bear in mind that, depending on its lending criteria, a bank may calculate the mortgage based on either the purchase price or the appraised value. If the valuation is lower than the purchase price, you may need to contribute more of your own money.

How Much Money Do You Need to Contribute Yourself?

Suppose you buy a property for €300,000 and the bank finances 70% of the purchase price.

The calculation would look like this:

• Purchase price: €300,000
• Mortgage covering 70%: €210,000
• Your contribution towards the purchase price: €90,000
• Taxes and other purchase costs must be added to this amount.

Purchase costs are therefore not included in the mortgage calculation. You should generally expect to pay these costs from your own funds.

What Additional Purchase Costs Should You Expect?

In addition to your contribution towards the property price, you need to allow for taxes and other costs associated with the purchase.

The amount depends on factors including the type of property and the region in which you buy. Existing properties are generally subject to transfer tax. New-build properties are generally subject to VAT and stamp duty.

There may also be costs for the notary, the Land Registry, legal assistance and mortgage processing.

As an initial estimate, buyers in this region often budget approximately 12% to 14% on top of the purchase price for purchase costs. This is not a fixed percentage: the actual amount may be lower or higher depending on the specific purchase.

Always have the costs calculated in advance for the property you are considering.

How Much of Your Monthly Income Can You Spend on a Mortgage?

Spanish banks assess not only how much money you have available, but also whether you can reasonably afford the monthly mortgage repayments.

They look at your total financial commitments, including an existing mortgage in the Netherlands or Belgium, personal loans, other credit commitments and the new Spanish mortgage.

As a general guideline, banks often consider total debt commitments of approximately 30% to 35% of net income. This is not an absolute legal limit. The bank may reach a different assessment depending on your circumstances and its lending policy.

For example, if your combined net monthly income is €5,000, 30% to 35% would amount to €1,500 to €1,750 in monthly financial commitments.

This is only an indication. The bank ultimately determines how much financing is responsible and feasible in your situation.

Is 2026 a Good Time to Buy a Property in Spain?

Whether 2026 is a good time for you to buy a property in Spain depends on several factors. Mortgage rates are important, but they are not the only factor determining whether a purchase is financially attractive.

The purchase price, available properties, location and your personal financial circumstances also play a role.

When interest rates fall, more buyers may consider taking out a mortgage. This can influence demand for properties. However, the effects vary by region and property type. Property prices may rise, remain stable or fall.

It is therefore unwise to wait solely in the hope of a possible interest rate reduction. Equally, you should avoid rushing into a purchase out of fear that property prices will soon increase.

Buying a property is a major financial decision. It is sensible to compare different scenarios: what would happen to your monthly repayments if interest rates rose? How much money would you have left after the purchase? And would the property fit your plans for the coming years?

By assessing your financing options in advance, you can search more effectively and better determine which properties fit within your budget.

Your Next Step Towards a Home in the Spanish Sunshine

Are you dreaming of owning a property on the southern Costa Blanca or in the province of Murcia? With a range of mortgage possibilities, flexible financing options and a diverse property market, there are plenty of opportunities to make your Spanish dream a reality.

At Lirice Real Estate, we are happy to help you find a property that suits your wishes and budget. We will discuss the available options with you and guide you step by step through the purchasing process, helping you move towards your home in the Spanish sunshine with confidence and proper preparation.

For personalised mortgage advice, it is important to discuss your options with a bank or mortgage adviser. This will help you understand what budget is realistic before making a final purchasing decision.

Would you like to know which properties fit within your budget?

Contact Lirice Real Estate without obligation. Together, we will explore the opportunities on the southern Costa Blanca and in the province of Murcia, helping you start your property search in Spain well prepared.

Lirice Real Estate – where all the pieces of the puzzle fit together.