How to get a mortgage in Spain?
Spanish banks currently offer exceptionally competitive financing terms. Taking out a mortgage to purchase real estate is an attractive option both for those who…
Foreign investors are exerting an increasingly strong influence on the Spanish property market, with Poles among its most active participants. Growing domestic and foreign demand, limited housing supply and a rise in the value of mortgages are driving up prices, but at the same time sparking debate about the risk of a market correction and the need to tighten the rules on property purchase financing.
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The share of foreign investors in the Spanish property market continues to grow
Spain is one of the most popular destinations for Poles looking to invest in property. According to figures from the Consejo General del Notariado (General Council of Notaries), the number of property purchases by foreign buyers in Spain has risen by as much as 80% over the last five years! In 2025, 138,254 transactions were recorded on the Spanish property market, of which 4,136 were carried out by Poles.
Agnieszka Marciniak-Kostrzewa, in an interview with Puls Biznesu, noted that the first property boom among Poles in Spain took place during the outbreak of the COVID-19 pandemic in 2020. A little later, in 2022, following the outbreak of the war in Ukraine, there was a further surge in interest in flats in Spain, driven by the search for a safe haven in which to invest capital.
According to experts, the influx of foreign capital into Spain has significantly revitalised the Spanish property market, particularly in the southern part of the country. The growing demand is also driven by Spain’s strong economic growth and the associated migration of workers from Latin America. According to Reuters, property prices in Spain in the first quarter of 2026 were 12.9 per cent higher than in the first quarter of 2025.
The limited supply of property in Spain is driving up demand for mortgages
The high level of interest in buying flats and houses in Spain is also having an impact on the mortgage market. More and more people are choosing to finance their property purchases with the help of a bank, which is why both the number of loans granted and their total value are rising.
In the first quarter of 2026, the value of mortgages in Spain rose by 3.8 per cent compared with the previous year, reaching €496 billion. By the end of 2025, the proportion of mortgage loans with a loan-to-value (LTV) ratio above 80% had reached 15.6 per cent. This is the highest figure since September 2018.
The situation in the Spanish property market led the International Monetary Fund to recommend in March this year that the Spanish central bank introduce an upper limit on the LTV ratio. However, despite initial considerations regarding the introduction of restrictions on mortgage lending, the Spanish central bank has decided not to take any action in this regard for the time being.
The Banco de España’s decision not to introduce an upper limit on the LTV ratio was driven by concerns over the potential negative impact on young people wishing to take out a mortgage and purchase their first property. Furthermore, the average annual LTV ratio in Spain in 2025 stood at 68.4 per cent, which remains below the record high of 71.1 per cent recorded in 2016. And according to historical data from the Banco de España, other average annual ratios, such as the loan-to-price ratio, the loan-to-income ratio and the debt-service-to-income ratio, remain well below their record highs. The key LTP (loan-to-price) ratio, which measures the proportion of the loan in the transaction price, stood at 77.6% in 2025 and is well below the pre-crisis historical levels of 107.8% recorded in 2006. It is also worth noting that, taking inflation into account, property prices in Spain in the first quarter of 2026 were 12.2% lower than at the peak of the previous boom in 2007.
Compared with the situation during the global financial crisis of 2008–2009, when variable-rate mortgages were the norm in Spain, the situation has changed dramatically. Currently, most banks in Spain offer fixed-rate mortgages. This removes an element of uncertainty for borrowers, stabilises the financial market at a systemic level and shifts the interest rate risk onto the banks. In July 2026, many banks are offering 30-year fixed-rate mortgages at an annual interest rate of 3 per cent.
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The share of Poles in the Spanish real estate market is growing. In some municipalities, they are already among the top three
According to the latest data, foreign buyers purchased a total of 138,254 properties in Spain in 2025, with Poles accounting for as many as 4,136 of those transactions. This placed our compatriots in 7th place among foreign buyers, and in some municipalities, Poles have already risen to 3rd place.
FAQ
Does the rise in the number of mortgages pose a risk of a repeat of the 2008 crisis?
According to most economists and property market analysts, the current situation differs from that which prevailed before the global financial crisis. Banks are now applying stricter criteria when assessing creditworthiness, and experts point out that the main reason today is the limited supply of housing, rather than, as was the case then, borrowers’ excessive levels of debt.
Does Spain plan to tighten the rules on granting mortgages?
As of June 2026, the Bank of Spain, despite the preliminary considerations expressed in May, has not decided to introduce additional restrictions on the granting of loans. The Bank of Spain considered that the current market situation does not require the introduction of additional regulations relating to limiting the maximum LTV ratio, as this could have negative consequences for young homebuyers.
