Fixed rate mortgages 2023

In recent years, fixed-rate mortgages have become increasingly popular with homebuyers in Spain. According to a recent study, 72% of those who plan to buy a home in 2023 prefer fixed-rate mortgages, despite the fact that they are currently more expensive than variable-rate mortgages.

This trend is not surprising, as fixed-rate mortgages offer greater stability and predictability in monthly payments, which is especially attractive to those seeking long-term financial stability. Unlike variable-rate mortgages, where interest is adjusted periodically based on changes in market interest rates, fixed-rate mortgages offer a fixed interest rate for the entire term of the loan.

Although fixed-rate mortgages typically carry a higher interest rate than adjustable-rate mortgages, this increased stability and predictability may be more valuable to some buyers than the short-term savings offered by an adjustable-rate mortgage.

Additionally, fixed-rate mortgages are a good option for those who expect interest rates to rise in the future. By opting for a fixed-rate mortgage, homebuyers can protect themselves against interest rate increases that could significantly increase their monthly payments.

However, it’s important to note that fixed-rate mortgages may not be the best option for all homebuyers. Those who expect to pay off their mortgage in a short time, or who have the financial ability to take the risk of an adjustable rate mortgage, may benefit more from an adjustable rate mortgage.

How much will fixed mortgages rise in 2023?

The Euribor has ended February 2023 at 3.534%, the highest data since November 2008. In practice, this will mean that the variable mortgages that are reviewed in March will see their quota become more expensive between 187.54 and 562.64 euros per month, which represents an increase of 50.8%

What will happen to mortgages in 2023?

With regard to mortgage credit, for the first quarter of 2023, banks anticipate that supply will continue to tighten, albeit moderately, while demand will fall again at a rate similar to that observed between October and December.

In summary, although fixed-rate mortgages are more expensive than adjustable-rate mortgages today, their greater stability and predictability make them an attractive option for many homebuyers. It is important to carefully evaluate your options and consider factors such as the loan term, current interest rates, and personal financial situation before making a decision on the type of mortgage to choose.

Michele Bullo
Partner and founder of IBIZA ROYAL AGENCY