With the European Central Bank (ECB) failing to reduce interest rates and demand for loans surging at the height of the housing market, banks are starting to abandon the war on mortgages. BBVA raised the fixed type of 10-year loan a few days ago, and the company is now increasing the TAE (annual equivalent amount including expenses) from 3.57% to 3.67%, which is the same as the interest rate on a 25-year loan.
Specifically, BBVA will apply the maximum bonus depending on the fixed rate type for the first six months. For the remaining period, the TAE will vary depending on the contract for additional products. To get the best deal, you should stay in your home and get multi-risk home insurance and loan amortization insurance.
In recent weeks, changes have begun to be noticed as the directives of Spain’s main organizations seek to end their offensive capabilities. Recently, Bankinter, Santander and BBVA have adjusted their mortgage prices. The fight to provide cheaper loans is therefore over, but this trend is likely to worsen in the coming months.
Onur Genci, BBVA’s mandated advisor, confirmed when announcing the results that the company had not set any targets to achieve in the Spanish mortgage sector and that the offer was highly tailored. The bank intends to stay on the back burner in the mortgage war, waiting to see how the sector moves and focusing on retaining its most loyal customers.
Since September, Spain has had the second-lowest mortgage interest rate in the euro zone after Malta, at 2.7%, well below the European average of 3.32%, according to the latest data from the European Central Bank (ECB).
Santander has also strengthened fixed mortgages for 25 years, raising interest rates from 3.07% to 3.27% per annum, while lowering the cap on bonuses to 1% (previously 1.10%). Santander delegate Hector Grisi said at a press conference after disclosing his financial results that the company was not in “unreasonable” competition. VanInter has priced its 25-year fixed mortgage at a bonus overall annual percentage rate of 3.46%, compared to the previous rate of 3.30%. Similarly, VanInter’s savings portal Coink increased its 25-year fixed loans, including bonds, from 2.93% to 3.09%. Gloria Ortiz, deputy general counsel at Bankinter, has noticed that 30-year mortgages in Spain are being sold below list price. Since September, housing loans for Unicaha and INE have also increased.
Laura Martinez, a spokeswoman for iAhorro, noted that the comparison table confirms how some companies adjust their mortgage offer prices. “What happened a few months ago was bajada after bajada, but now that’s all there is. Despite the fact that it is still possible to achieve very attractive terms on both fixed and mixed mortgages, depending on the national profile, there is little movement, and there is real, but not a positive one.”Meanwhile HelpM Experts from the yCash.com comparison site agree: “The most notable thing in recent months has been the ECB’s freezing of types and the reversal of Euribar. And the reaction of Spanish banks has put an end to the price war that is unfolding in the mortgage market from the end of 2023 to the beginning of 2025.”
Euribar, a key indicator for calculating variable mortgages in Spain, has risen significantly and is at a level not seen since March (2.216% daily rate). The ECB is not expected to deal closely with these types of interests. Carlos López, head of Euribor.com.es, believes that when it comes to mortgage offerings, “TIN will become measured across a wider range of areas once the type of reporting is consolidated at the right level and there is confidence in predicting low inflation. In terms of variables, the key will continue to be solid differentials and the ability of Euribor to absorb corrections while on a plateau.”
With some fixed mortgages on the market increasing, the current best offers with bonus conditions are Hipoteca Fija Open de Openbank at 2.98% TAE and Hipoteca Vamos de Ibercaja at 3.10% TAE.
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