If you’re thinking of buying a home in Spain this year or you’ve already taken out a loan, it’s important to find out what will happen to mortgages going forward, known as hipotecas in Spanish.
At the end of 2025, Spain saw a continuation in rising house prices, as well as a high Euribor – the daily reference rate, published by the European Money Markets Institute based on average interest rates across the EU.
It is the main index used by Spanish banks to calculate interest rates here. When the Euribor rises, the monthly payments on variable-rate mortgages increase.
After a period of low interest rates until 2024, recent increases in the Euribor have made these types of mortgages a lot more expensive.
READ ALSO: What will happen to property prices and rents in Spain in 2026?
Over the past year, many have opted for fixed-rate or hybrid mortgages instead of variable ones, according to a study by Fotocasa Research.
According to this research, the proportion of people who chose a variable-rate mortgage fell from 15 percent in 2024 to 12 percent in 2025, while hybrid mortgages or mixed rate ones, dropped from 19 percent to 16 percent.
With rising house prices, as well as rental costs, high demand and shortage in supply – what will happen to the mortgage rates this year?
READ ALSO: 1.6 million renters in Spain face eviction or price hikes in 2026
Cost of mortgages in 2026
Data from the Bank of Spain shows that in November 2025, the Euribor was 2.217 percent, and it had been increasing for several months.
In 2026, experts generally believe that the Euribor index will not go back to very low levels, but that it may stabilise compared to 2025.
Bankinter’s forecast is a rate of 2.20 to 2.25 percent for the next 12 months, while Caixabank has predicted 2.18 percent and the European Central Bank says 1.90 percent.
Spanish financial advisor Bayteca says that interest rates should not drastically increase the cost of mortgages within the next year, so they predict relatively stable costs throughout 2026.
Cost comparison website Kelisto, however, believes that mortgages could be slightly more expensive this year because they had been rising continually in much of 2025.
Spanish newspaper El Mundo has said that “the battle to attract customers with cheaper mortgages has come to an end and major national banks have already decided to start raising mortgage prices after a competitive 2025”.
READ ALSO – Casa 47: What to know about Spain’s new public housing department
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Increase in mortgage signings
Data from Spain’s National Statistics Institute (INE) and the Housing and Land Observatory show that mortgage signings grew by 12.2 percent from September 2024.
A total of 34,416 homes were purchased in the first quarter of 2025, the best figure since 2009, representing an increase of 11.5 percent compared to the previous year.
Bayteca believes that even more mortgages will be taken out in Spain in 2026 than last year due to the continued rise in rental prices and the housing shortage.
Kelisto also agrees, but has said that the growth will be more moderate than in previous years.
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Which type of mortgage will be the most popular in 2026?
Again, in 2026, fixed and mixed-rate mortgages will continue to be the most popular, because of the fact that they offer greater security by guaranteeing stable monthly payments.
Variable-rate mortgages could regain in popularity only if the Euribor falls, but they are not expected to become the dominant type of mortgage again.
Mixed mortgages with fixed rates for 5 to 10 years are becoming more popular too. They have risen from just 3 to 4 percent of the total number of mortgages to nearly 10 percent, reflecting a more attractive product for those seeking flexibility without taking on the high risks of interest rate volatility.
What will happen to the mortgage approval rate in 2026?
According to Kelisto, due to the increasing risk in recent years, banks could become more selective when approving mortgages, but those stable income and little debt should not have problems.
Bayteca agrees saying that “the increase in prices and the need to request more capital to buy housing could lead banks to reject more applications”.
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What to take into consideration when taking out a mortgage in 2026
According to Grupo Caja Rural, if you plan on buying a property in Spain, you should not allocate more than 30 percent of your income to the monthly mortgage payments.
They also suggest shopping around as much as possible so you can get the best deal and you know exactly what you’re getting yourself into.
It’s important you also take into account the expenses associated with a house purchase in Spain such as property registration, taxes and home insurance.
