Fixed vs variable mortgage in Spain: guide for foreign buyers

Side-by-side comparison for non-residents

Here is how fixed and variable mortgages compare specifically for foreign buyers in the current market:

The currency factor: why it matters more for foreigners

If your income is in GBP, USD or another non-euro currency, a variable mortgage creates a double layer of uncertainty. Your effective payment fluctuates with both the Euríbor AND the exchange rate.

Example: a €1,200/month mortgage payment for a UK buyer costs about £1,017 when GBP/EUR is 1.18, but about £1,143 when it drops to 1.05. Add a Euríbor rise on top, and the payment could jump to £1,300+ — more than a quarter above the base case.

A fixed rate eliminates one of these variables entirely, leaving you only with exchange rate risk to manage.

Euríbor in 2026: what the trends suggest

The Euríbor moves with ECB policy, so check its current level before deciding: a variable rate is only as cheap as the Euríbor of each review date.

Forecasts are a weak guide. The monthly average of the 12-month Euríbor went from below zero in January 2022 to above 4% in autumn 2023, according to the Banco de España's series.

For non-residents who cannot easily switch banks or refinance, the cost of being wrong about rate direction is higher than for residents.

What we recommend for different profiles

• •Holiday home, non-euro income, first property in Spain: Fixed rate. You want predictability while you learn the system.
• •Investment property with rental income in euros: Variable or mixed. The rental income partially offsets Euríbor risk, and if you are EU/EEA resident you can deduct the interest from your rental income.
• •Retiring to Spain, euro pension: Variable is viable if your pension is stable and you have savings. The lower initial payment helps with cash flow.
• •Short-term hold (plan to sell within a few years): Variable can make sense: the early-repayment compensation on a variable loan is capped at 0.25% in the first 3 years or 0.15% in the first 5, then nothing, against up to 2% on a fixed loan.
• •Long-term hold (15+ years): Fixed or mixed. Over long periods, Euríbor will inevitably cycle through highs and lows.