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Where in Spain is it easiest and hardest to repay a mortgage?

Find out where in Spain a mortgage is likely to eat up most of your monthly earnings.

Published: 2 January 2019 10:55 CET
Where in Spain is it easiest and hardest to repay a mortgage?
Málaga skyline. Photo: Paolo Trabattoni/Flickr

Madrid and Barcelona aren’t the cities in Spain where homeowners cough up the most for their mortgages. 

That’s according to a new study by Spanish finance evaluator Tinsa, who have drawn a ratio between average mortgage prices and monthly wages in different cities and provinces across Spain.

The Balearic Islands and Malaga, home to some of Spain’s biggest expat populations, are at the top of the leaderboard.

In the archipelago made up of Majorca, Menorca, Ibiza and Formentera the average financial burden for families dealing with their first year of mortgage repayments is of 23.5 percent.

The Balearics also had the highest average mortgage in Spain in the second trimester of 2018 – just over €175,000.

Malaga is next in line in terms of the chunk taken out of monthly wages devoted to mortgage repayment – 22.2 percent – even though the average property price in this city and province is seventh in the table.

In third position is Barcelona, where average mortgages stand at roughly €153,000, representing 18.2 percent of families’ monthly earnings.

Madrid presents perhaps the most interesting findings on the list, as although average home loans are the second highest in Spain (€172K), the financial burden to homeowners is less on average (9th in the table), largely due to higher wages in the Spanish capital.

Source: El País/Tinsa

Provinces in Spain where mortgage repayments represent the lowest burden for families include Tarragona , León, Huesca, Lugo (all at around 13 percent), Teruel, Alava, Palencia, Castellón and Soria (at around 12).

Most of these cities and the provinces in which they lie also have some of the lowest mortgage prices in Spain.

The average mortgage in Spain is €121,737, representing 17 percent of earnings before tax and deductions.

According to Spanish real estate valuation firm Sociedad de Tasación, Spaniards currently need to work an average of 7.6 years to repay their mortgages, that’s if all their wages were used for home loan repayments.

Using this calculation, anyone with a mortgage in the Balearics would need to work 15.4 years to pay it off whereas in La Rioja it would be just 4.8 years.

SEE ALSO: Spain's ten cheapest cities and why (or why not) you should move there

Average monthly mortgage repayments are around €850 in the Mediterranean archipelago, roughly €500 higher than in cities such as Cuenca, Lugo and Ciudad Real.

Homeowners in Madrid and Barcelona repay on average €739 and €731 a month respectively if they’ve taken out a loan.

READ ALSO: What you need to know about Spain's newest rent law changes 

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LIFE IN SPAIN

EXPLAINED: How to buy a boat in Spain

Considering buying a boat to enjoy life to the fullest in Spain? Here's a breakdown of costs, legal requirements, financing options and useful tips to factor in before purchasing a bowrider, a day sailer, a yacht or any other 'barco'.

Published: 3 May 2024 12:18 CEST
EXPLAINED: How to buy a boat in Spain

Spain has around 8,000km of coastline, and access to the Mediterranean, Atlantic, and Bay of Biscay. For boat enthusiasts, you’re spoilt for choice in Spain.

But it’s not just as simple as picking out a boat, buying it and setting off into the ocean.

There are several decisions you’ll need to make first, rules to follow, administrative hoops to jump through, and then maintenance costs on top of that.

Types of boats

The first thing you’ll need to consider is the type of boat you want to buy.

Generally they can be split into two broad categories: motor boats and sailing boats.

Motor boats are the most popular type of boat sold and offer the greatest variety of options because they include pretty much everything from smaller more affordable power boats to huge luxury yachts.

As such, you could get a smaller motor boat, say for day trips of fishing on the coast, for as little as €10,000, whereas yachts, as you can imagine, can cost millions, depending on the size, power, design and quality of the boat.

According to several Spanish maritime sources, buying a used boat that you can live on in Spain can cost anywhere between €13,000 and €150,000.

Spanish website topbarcos.com has hundreds of boats listed for you to get an idea of what’s available in the second-hand market, as well as a page for new vessels.

Sailing boats are the more environmentally friendly option and require the most skill to sail, and include light sailboats, catamarans and trimarans. Again, prices vary from €5,000 to over a million, depending on the size, type of sail, material and quality of the boat.

Once you’ve decided on the type of boat you want and found one you’d like to buy, you’ll need to consider any potential legal requirements.

A woman sits next to a yacht in Puerto Banús luxury marina in Marbella. (Photo by JORGE GUERRERO / AFP)

What are the legal requirements when buying a boat in Spain?

  • The correct nautical qualifications for the type and size of the boat you want to buy. There are different types of nautical licences to sail different boats in Spain, such as the PNB (Basic Navigation Skipper), the PER (Recreational Boats Skipper), the PY (Yacht Skipper) or the CY (Yacht Captain). Each has specific limitations in terms of length, power, distance from the coast and the type of sailing you can do.
  • Compulsory civil liability insurance that covers possible damages that you may cause to third parties with your boat.
  • Have all the necessary documentation for the boat, such as the certificate of seaworthiness and (essentially an MOT for the boat, showing that it’s in working order) and the navigation permit.
  • You’ll also need to pay the corresponding taxes on the boat purchase, such as VAT (21 percent), the special tax on certain means of transport (12 percent) or the transfer tax (4 or 6 percent, depending on the region).

READ ALSO: How do I get my boat licence in Spain

What other factors should you keep in mind before buying?

Think about what type of navigation you want to do, how often, with how many people and what your budget is. 

Don’t go with the first boat you see. Search and compare different models, brands, prices, conditions etc and don’t forget to keep an eye out for scams.

It’s a no-brainer but try the boat before you buy it, don’t just rely on photos or descriptions. Request a test ride to check the condition and navigational operation of the boat. 

If you do not have much experience or knowledge of nautical matters, it’s advisable to hire a professional to accompany you throughout the purchasing process. It could help you avoid possible legal, technical or administrative problems that arise.

They will also assist you with checking the condition of the boat’s interior: the carpentry, the engine, the electrical installation, the tanks, bilge, kitchen, bathroom and other compartments.

Here is a list of dozens of Spain-based brokers (as they’re called) or nautical companies that can assist you. 

Crucially, they will also be able to give you an informed assessment of what price you should be paying for the boat you’ve chosen. 

How can you pay for a boat?

Unless you have enough disposable income to pay for it cash, you probably want to know what kind of financing is available to you. 

There is the nautical mortgage (hipoteca náutica), which mimics the system for property mortgages, including the need for a down payment and embargo conditions in non-payment situations. 

Nautical credits (Créditos náuticos) also exist, which again are not too different from regular loans, including fewer notary costs than nautical mortgages and fixed interest rates. 

And lastly, nautical leasing is also an option, which is when a company acquires a boat and rents it to a customer for a certain period of time (normally between 4 and 15 years) and usually with an option to buy at the end of the contract.

Don’t forget the upcoming maintenance costs

If you manage all that and buy the boat, you’ll need to maintain the boat and pay costs to do so. These include:

The mooring: ie. the place where the boat is left when it is not in use. The price of mooring depends on the size of the boat and the location of the port. It can range from around €100 per month to several thousand.

However, be warned, in Spain these aren’t easy to come by. The Association of Industries, Commerce and Nautical Services (ADIN), estimates that Spain has only 107,894 moorings for 229,000 boats.

You’ll also need to pay for periodical technical checks that must be carried out on the boat from time to time to check its condition and operation. Again, the price depends on the type and size of the boat and the services contracted. It can vary from around €200 euros to several thousand.

Regularly cleaning the boat to avoid dirt, rust, algae, and parasites damaging the boat can also be quite costly. It can vary from as little as €50 for smaller boats to several hundred for bigger ones, and most experts recommend it should be done every 4-6 weeks.

READ ALSO: How to live on a boat in Spanish waters

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