Banks are starting to abandon the war on mortgages after the European Central Bank (ECB) stopped reducing interest rates and at a time when demand for loans is skyrocketing due to the booming real estate market. A few days ago, BBVA already increased the fixed rate on its 10-year mortgage, and now the entity is doing the same with the interest on the 25-year loan, from 3.57% to 3.67% APR, equivalent annual rate, which includes fees.
Specifically, BBVA applies the maximum bonus at the fixed interest rate in the first semester. In the rest of the period, the APR varies depending on the negotiation of additional products. To obtain the best conditions it is necessary to pay the paycheck and take out multi-risk home insurance and loan repayment insurance.
In recent weeks, executives at Spain’s major entities have been advocating an end to aggressive competition, and changes are starting to be noticed. Recently Bankinter, Santander and also BBVA have adjusted the prices of their mortgages upwards. Thus the struggle to offer the most convenient financing subsides, a trend that could worsen in the following months.
The general director of BBVA, Onur Genç, assured during the presentation of the results that the entity has not set itself any objectives to achieve in the mortgage segment in Spain and that the offers are already very limited. The bank is committed to staying in the shadows in the mortgage wars as it awaits industry movements and is focused on customer loyalty.
According to the most updated data from the European Central Bank (ECB), until September Spain was the second country – after Malta – with the cheapest mortgage loans in the euro area, with a rate of 2.7%, well below the European average, which is 3.32%.
Santander has also tightened the 25-year fixed mortgage and raised interest from 3.07% to 3.27% APR, lowering the maximum bonus to 1% (from the previous 1.10%). Santander’s chief executive, Héctor Grisi, said in the press conference after making its accounts public that the entity does not intend to compete “irrationally”. For its part, Bankinter has priced its 25-year fixed mortgage with the full bonus at 3.46% APR compared to the previous 3.30%. Similarly, Coinc, Bankinter’s savings portal, increased its 25-year fixed loan from 2.93% to 3.09% including the link. The general director of Bankinter, Gloria Ortiz, underlined that in Spain 30-year mortgages are sold at prices below the money.
iAhorro spokeswoman Laura Martínez confirms that the comparator is already seeing how some institutions are adjusting their mortgage offers upwards. “What months ago were falling after falling, now they are no longer. The movements are few and those that do exist are not positive, although very advantageous conditions can still be obtained in both fixed and mixed mortgages for citizens, depending on their profile.” For their part, the experts at the comparator HelpMyCash.com argue that “the highlight of the last few months is that the ECB froze rates and the Euribor rose. And the reaction of Spanish banks was to put an end to the price war that was being fought in the mortgage market between the end of 2023 and the beginning of 2025”.
After the increases that some fixed mortgages are experiencing on the market, currently the most advantageous offers, which satisfy the conditions of the bonus, are: the Fixed Open Mortgage of Openbank at 2.98% APR, the Vamos Mortgage of Ibercaja at 3.10% APR.
