What this rate measures
Spanish banks report to the Banco de España the rate and amount of each new home loan to households, and the Banco de España publishes them in its interest rate statistics. This page shows the ECB's composite of that data, the "cost of borrowing for households for house purchase", from the ECB's Data Portal. It averages the rates for each initial fixation period, weighting each by a 24-month moving average of new lending, so it compares directly with Finland, France and the other euro countries.
It is the agreed annual rate (the tipo nominal) on new bank loans. It leaves out fees and linked products such as insurance, which the TAE in an offer includes. It is also not the same as the average the INE publishes in its monthly mortgage statistics: the INE counts mortgages as they are recorded at the property registries, so its figures cover a different set of loans and arrive later.
How Spanish mortgages are priced
The Banco de España's customer portal sets out the three kinds of mortgage you will be offered:
- Tipo fijo: one rate, and so one instalment, for the whole life of the loan.
- Tipo variable: a reference index plus a fixed margin, reviewed at set intervals, usually every six or twelve months. The usual index is 12-month Euribor, which the Banco de España publishes each month as one of the official mortgage reference rates.
- Tipo mixto: a fixed rate for an initial period of several years, then variable for the rest.
For most of the euro's history Spanish mortgages were overwhelmingly variable. That changed while Euribor was below zero and fixed rates were cheap, and the INE's recent releases show more new home mortgages signed at a fixed rate than at a variable one. The mix matters for this line: the average moves when borrowers switch between fixed and variable loans, not only when banks change prices.
A variable loan feels an ECB decision through Euribor, which moves with where banks expect the ECB deposit facility rate to be. Your rate changes at your next review date, to the Euribor reading the contract names, often that of a month or two before the review, plus your margin. A fixed loan, or a mixed one in its fixed years, does not move.
Comparing it with a quote
This line mixes fixed, mixed and variable loans, so read it as the level of the market rather than your rate. Compare a fixed offer with other fixed offers, and a variable one by its margin over Euribor, which is the part that lasts. A bank may lower the margin if you take its insurance or pay your salary into it; the TAE in each offer, and the cost of those linked products, show whether the discount is worth it.
Put a quote into the mortgage calculator for Spain; for a variable loan, try it again at a higher rate to see your instalment after a review. To weigh buying against renting, use the rent vs buy calculator.
Reading the chart and the table
Each point is one month, dated the first of the month it covers, from January 2003. While most new loans were variable the line followed Euribor closely; as fixed and mixed loans have taken a larger share, it responds more slowly to a change in Euribor. Figures appear about five weeks after the month ends and recent months can be revised; the CSV download carries the ECB's own values.