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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REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you're considering making the move and buying property in Spain, but don't fancy purchasing in a rural village in the middle of nowhere, you should know where the cheapest, most in-demand parts of the country are.

REVEALED: The cheapest most in-demand areas in Spain to buy a house

If you’re thinking about relocating, Spain is a fantastic place to do it. Foreigners have been moving to Spain for decades, not only for its fantastic food and weather, along with a laid-back lifestyle, but housing is generally affordable – if you know where to look.

Though the rise in the Euribor has sent interest rates spiking, house prices in Spain are expected to flatten somewhat in 2023 and it could be a good year to find a bargain, depending on your financial situation.

Knowing what type of house you want and where in Spain you want to live is one thing, but knowing the cheapest, yet most in-demand parts of the country could really help you narrow down your search.

Fortunately, Spain’s leading property website Idealista has put together a list of the most ‘in demand’ municipalities of Spain and where you can find the most expensive and, more importantly for the house hunters among us, the cheapest municipalities of Spain to buy property.

It’s based on data from the last quarter of 2022 and is the average price of housing in towns with more than 1,300 sale announcements and costs valued at more than €1,100 per square metre. 

You can find the ten cheapest areas of Spain to buy property by average price below, but it’s worth noting that Idealista did these rankings by average price across the entire municipality, so there are likely individual towns and villages dotted around Spain where prices are significantly lower.

That said, this list gives you a good idea of the areas to look out for.

READ ALSO:  What will happen with property prices in Spain in 2023?

The 10 cheapest municipalities in Spain to buy property 

Santa Pola (Alicante) – Santa Pola, in the Alicante province, is the cheapest most in-demand municipality to buy a house, according to Idealista’s rankings. The average price for a house in Santa Pola costs just €151,796, though this may come as a surprise given its prime location in a foreign hotspot on the sought-after Costa Blanca. The main town of Santa Pola itself is a small beachfront community with a population of around 35,000. It also has a large foreign population and is a short drive or bus away from both Alicante and Elche.

Ourense (Galicia) – Next on the list is Ourense in Galicia where the average price is €154,941. The municipality is home to several towns and villages, surrounding the main medium-sized town of Ourense itself in southern Galicia. The town has a population of around 105,000 and is a little over an hour’s drive from both Santiago de Compostela and the coastal city of Pontevedra.

Oviedo (Asturias) – Third on the list is the municipality of Oviedo where you’ll pay an average of €154,968 for a property. Another area in northern Spain, the main city Oviedo itself, which is the capital of Asturias and has a population of 220,000. It sits between Cantabrian mountains and the Bay of Biscay. It’s known for its picturesque medieval old town and impressive architecture. 

Jerez de la Frontera (Cádiz) – Properties cost an average of €155,563 in the municipality of Jerez de la Frontera, or Jerez as it’s commonly referred to. It’s located in the Cádiz province of Andalusia and is a real piece of ‘traditional’ Spain. Jerez city is a decent-sized place with a little over 200,000 people and is known for horses, flamenco dancing and sherry, as well as the Alcázar de Jerez, an 11th-century fortress that harks back to Andalusia’s Moorish past.

READ ALSO: Is it better to buy or rent in Spain right now?

Torrevieja (Alicante) – Another municipality in Alicante and another incredibly popular with foreign homeowners. Properties here go for an average of €155,787. Torrevieja itself has a population of 82,000 and is another coastal town, but also has nature trails and salt plains nearby.

Murcia (Murcia) – Murcia is often overlooked, wedged between Alicante and Andalusia, but you could grab a bargain here with average prices of €157,119. Murcia capital is a bustling city of almost 450,000 people, and is strategically placed for trips to the Costa Blanca, Costa Calida, Costa del Sol, and Costa de Almeria.

Parla (Madrid) – The municipality of Parla lies just 20km south of Madrid and the town of the same name is home to 130,000 residents. It’s a great commuter area for those who work in Getafe or the capital. A house here costs an average of €160,652. 

Salamanca (Castilla y León) – The municipality of Salamanca surrounds the capital of Salamanca in Castilla y León in northwestern Spain. Buying a property in this area costs an average of €162,909. The main city of Salamanca is known for its university, which is the oldest in Spain and dates back to 1218. Understandably, much of Salamanca’s roughly 150,000 residents are students, which gives the town a lively atmosphere.

Burgos (Castilla y León) – Another northwestern Castilla y León municipality, is Burgos has around, where you can buy a house for just €163,164. The city of Burgos has around 180,000 inhabitants and is known for its medieval architecture and grand cathedral. 

Dos Hermanas (Sevilla) – The second most populous municipality in the province of Seville, properties cost an average of €163.274 here. The Andalusian town is just 15km south of Seville, making it great for commuters or those who want plenty of culture nearby.