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Becoming a homeowner in Spain remains a distant dream for millions, but it's not just about house prices continuing their rapid climb. The main obstacle? The hefty savings needed for a mortgage deposit that pushes many potential buyers towards renting instead.

 

Financial institutions typically limit mortgages to 80 per cent of the lower market value or purchase price of a property. That means buyers must find the remaining 20 per cent as a down payment, and also cover buying costs like taxes and fees which can add another 15 per cent. According to Qualis Credit Risk, an insurance company specialising in mortgages, the average Spanish resident needs nearly €44,000 in savings to even qualify for a mortgage. This represents about 27 per cent of the total purchase price and is now the biggest barrier to homeownership.

 

“This initial outlay has become a significant barrier to entry into the mortgage market,” says Jaime Marín, director of Qualis Credit Risk for the Iberian market. He points out that thousands who can afford monthly loan repayments still end up having to rent because they lack the savings for the deposit. “They have to turn to the rental market because they don't have enough savings for a down payment,” he explains, a dynamic which has pushed rents up sharply in many cities.

 

In fact, rental prices have jumped 24 per cent over the last two years, fuelled by an 80 per cent surge in rental demand and simultaneous decline in available apartments by 17 per cent, according to real estate website Idealista. This puts extra strain on families already renting, with 40 per cent spending more than 40 per cent of their income on housing, well above the recommended 30 per cent level.

 

As well as this, house prices in Spain increased by 6.7 per cent year-on-year in May 2025. Although the overall national growth has eased somewhat, eight regions recorded double-digit rises, with Murcia leading the pack with a remarkable 37 per cent increase. The average price per square metre across the country now stands at €1,836, climbing to around €3,500 in more expensive areas like the Balearic Islands and Madrid.

 

Corresponding to these price levels, the savings needed to secure a mortgage vary widely. For instance, buyers in the Balearics, Madrid and Barcelona require around €78,779, €74,126 and €70,537 respectively, while in provinces like Ciudad Real, Jaén and Zamora, the deposit needed is significantly lower, closer to €19,000 to €21,000.

 

For many people who call Spain their home, this financial barrier continues to put the dream of owning their own home well out of reach, while ongoing rent increases strain household budgets.

 

 

 

 

 

Image: Nattanan Kanchanapra/Pixabay