How to properly compare mortgage offers in Spain
Banks don't present mortgage offers so you can understand them. They present them so they look better than they are. They mix TIN and TAE to suit their pitch, bury the real cost inside bundled products (vinculaciones), and count on you not doing the maths. Three or four offers on the table mean nothing if you can't read what they actually say.
TIN vs TAE: what to look at and when
TIN (Tipo de Interes Nominal) is the pure interest rate — what you pay on the loan itself. TAE (Tasa Anual Equivalente) is the equivalent of APR: it includes TIN plus all associated costs — commissions, insurance, account fees, even postal charges. In theory, TAE is the right number for comparison. In practice, because each person chooses different bundled products, the TAE on your FEIN doesn't reflect your real cost.
What experienced borrowers do: compare by TIN when the bundled products are similar, and calculate the total real cost (monthly payment + insurance + annual fees) when they're not. As one bank employee explains: "The TAE adds everything — life insurance over 30 years, home insurance, account fees... What you actually pay monthly is the TIN."
The FEIN is your key document
The FEIN (Ficha Europea de Informacion Normalizada) is Spain's standardized mortgage information sheet. Every bank must give you one before you sign. What banks don't volunteer:
- Signing a FEIN commits you to nothing. You can hold multiple FEINs from different banks simultaneously. There's no legal limit.
- Compare FEINs side by side, not from memory.
- Watch the commissions section: early repayment (amortizacion), full cancellation (cancelacion), transfer to another bank (subrogacion), and renegotiation (novacion). Some offers with great TINs come with high commissions that lock you in. That's the business model.
Bundled products: what raises and lowers the rate
Banks offer rate reductions (bonificaciones) in exchange for buying their products: direct deposit of salary (nomina), home insurance (seguro de hogar), life insurance (seguro de vida), pension plans, credit cards. Typically, salary deposit reduces the rate by 0.10%-0.30%, and each insurance product another 0.10%-0.20%.
The trick: the bank shows you the discount but not the subtraction. A life insurance policy that knocks 0.10% off your rate but costs 400 euros per year may not be worth it if your monthly payment only drops 15 euros. Do the math with real numbers, not percentages.
Common forum advice: sign up for salary deposit only (it's free) and home insurance (mandatory anyway). Life insurance and pension plans can be cancelled after the first year — the bank will raise your rate, but calculate whether you still save overall.
What else to compare beyond the rate
- Approval timeline. Some banks take 48 hours, others three weeks. If you have an arras (deposit) deadline, this matters enormously.
- Property valuation (tasacion). Ask whether they accept an external valuation or require their own. A valuation from an accredited firm like Tinsa can be used at multiple banks, saving you 300-500 euros per duplicate.
- Future commissions. Check subrogacion and novacion fees. If you want to renegotiate or switch banks in a couple of years, 0% on these commissions is extremely valuable. Ibercaja, for example, offers 0% on subrogacion but 1% on novacion — that shapes your future strategy. Banks design these commissions to keep you locked in.
- The gestoria. Banks outsource paperwork to a gestoria (administrative firm). Some have terrible reviews and cause delays. Ask before committing.
The method: a spreadsheet and cold logic
The borrowers who get the best results do this: open a spreadsheet with every offer, calculate the monthly payment with and without bundled products, add the annual cost of those products, and compare total cost at 5, 10, and 30 years. Don't fixate on the rate — focus on what the mortgage costs you in euros. Banks count on you not doing this exercise.