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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.

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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MOVING TO SPAIN

How to find temporary accommodation in Spain when you first arrive

One of the most common questions people moving to Spain ask is where they can rent temporary accommodation while looking for somewhere more permanent. This can be particularly tricky, but we've found some of the best places to look.

How to find temporary accommodation in Spain when you first arrive

So you’ve sorted out your visas, you’ve done all your packing and have either sold or moved out of your home, but when you arrive in Spain you’re not exactly sure where you’re going to stay.  

Of course, it’s not the best idea to sign a contract ahead of time for a more permanent place before you’ve actually seen it in person. Photos don’t always accurately represent what the house or apartment looks like in reality and you won’t really be able to get a feel for the neighbourhood without being there. 

On top of this, rental scams are rife in some places in Spain, particularly in the bigger more popular cities like Barcelona. Often people will place an ad (which usually looks too good to be true) and get you to wire over a deposit to secure it in advance, but here’s the catch – the place doesn’t usually exist.

This is why it’s important to never hand over money to secure a place to live in Spain before you’ve actually seen it in person and you can get the keys as soon as you sign the contract.

But, finding a place to live in a new country can be difficult and it can take time, so while you look for somewhere, you’re going to need temporary accommodation for a couple of months. This can be tricky too because often temporary accommodation is geared towards tourists and you’ll be paying tourist prices too.

While Idealista and Fotocasa are two of the most popular sites to look for accommodation in Spain, when you only want somewhere for a couple of months, there’s no point looking there, as most places will have yearly contracts.

Keep in mind with short-term rentals for a couple of months, you’re going to be paying higher than the average monthly rent, however, for this, the apartments are usually fully furnished, including kitchen utensils, wi-fi already connected and offer you the flexibility of shorter contracts.

Short-term rental agencies

Specialised short-term rental agencies are the best way to go, which will allow you to sign contacts for less than the typical one year. These types of agencies are usually found in Spain’s big cities that are popular with foreigners, such as Madrid and Barcelona.

Trying searching in Spanish too by typing alquiler de temporada or alquiler temporal plus the name of the city or town you’re looking in. This way you may be able to find places that offer better value. 

Barcelona

In Barcelona, check out aTemporal an agency that started up precisely to fix the problem of trying to find accommodation in-between tourist accommodation and long-term rentals. They rent out apartments for anywhere from 32 days to 11 months.

ShBarcelona is another agency that specialises in these types of rentals and have properties all over the city.

READ ALSO – Moving to Barcelona: A guide to the best neighbourhoods to live in

Madrid

In Madrid, try DFLAT, which was created by two professionals from the Instituto de Empresa University after discovering the difficulties professionals and foreigners found when looking for an apartment in Madrid. Sh also has a good branch in Madrid.  

Valencia

In Valencia, Dasha Living Space has both short and long-term fully furnished flats available and  Valenvi Flats also offers rentals for between three and six months.

READ ALSO – Moving to Valencia: A guide to the best neighbourhoods to live in

Airbnb

While the nightly rate of Airbnb apartments is typically too expensive to rent for a couple of months, you may be able to find some deals. Often when you input dates for a month into Airbnb, you’ll find that several places have a monthly discount offered. Also, some owners will do a deal for a couple of months. If it’s winter for example and they know they’re not going to get many tourists anyway, they may be willing to negotiate.

Vrbo

Like Airbnb, the properties on Vrbo are rented out directly by the owners. While the site is also mainly focused on tourists, some owners may negotiate outside of the tourist season.

Housesitting

If you’re willing to try something a little bit different, then housesitting could be the way to go. This is where you live in somebody’s house for free, in exchange for looking after their pets and their property.

Often people only need someone for a few days, but sometimes you’ll see house sits available for a month or longer. This is perhaps a better option for those who are flexible on where they might want to live and are trying out a few different places. It’s also better for those wanting to live in smaller towns or villages rather than the bigger cities, as there are fewer postings for these popular locations. Trusted Housesitters and Mind My House are good options. 

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