Comparing a 4.85% Spanish mortgage quote on an €828,000 purchase

L

LongGate

Homeowner
4.85% fixed for 20 years is the offer I now have for a Madrid purchase priced at about €828,000. It looked more attractive at first glance, but the fees and the applicable LTV band make the headline figure a poor guide.

How are people comparing similar Spanish loans in practice? I could use APR, add up the payments and charges for the years I am likely to keep the mortgage, or model the full term. I also want to see what an early exit would cost and whether portability has meaningful conditions. The payments need to work without relying on a future refinance.
 
What changed my view on these comparisons was seeing how strongly the assumed exit date affected the result. APR can be a useful check, but I would first run every offer with the same principal, term and LTV, adding the required charges at the dates when they are paid.

There is one basic point to clear up first: is €828,000 the property price or the requested mortgage? Until the actual borrowing and LTV band are known, neither the 4.85% rate nor its payment tells us enough.
 
€828,000 is the purchase price, not the loan balance—good distinction. I’ll ask each lender to rerun its illustration using the same borrowing amount and LTV rather than comparing headline examples. I’ll also request the fee breakdown and early-repayment wording in writing. For affordability, I’m going to treat refinancing as optional upside, not as the plan needed to make the payments work.
 
Ideally you would choose the loan that remains reasonable for all 20 years, but the obstacle is that you may sell or repay long before then. I would calculate the position at several plausible exit dates rather than letting the full-term result dominate.

If an early move is realistic, upfront charges and repayment costs deserve more weight. If you are confident of staying, the longer-run interest total matters more. Portability belongs in the first branch only after the lender's written conditions show that it could actually apply to a future purchase.
 
Getting the holding period wrong could make the apparent cheapest offer quite expensive. I would build a table showing the initial outlay, monthly instalments, outstanding balance and stated exit charge at several dates, rather than selecting one assumed refinance year.

Then test affordability in stages: first on the current terms with no refinance, and separately under any rate reset that applies before year 20. If the base case is comfortable, refinancing can remain an option; if the numbers only work after refinancing, the loan is carrying more risk than its initial rate suggests.
 
You must log in or register to reply here.
Back
Top