One of the most important expenses in a person's life is buying their own house. Along with buying a car, this is one of the most demanding financial decisions that a layman can take to prepare and plan.
In the last few years, a huge number of Spaniards have taken care of buying their own homes, largely due to the large savings accumulated during the pandemic and incredibly affordable credit conditions.
According to the research of the real estate portal Fotocasa («Study of the housing market in 2021-22»), since the beginning of COVID-19 in 2020, the number of Spaniards who were looking for an opportunity to purchase new housing has grown to 50% in the share of all consumers in the market. By 2022, only 38% were looking for rental opportunities. Another 12% were looking for options in both segments of the housing market.
The activity of buyers in the market, according to the portal, returned to pre-pandemic levels, and the demand for housing increased by 10 points, while the rental segment lost 12 points. All this, of course, has led to an increase in prices for residential real estate, especially against the background of its noticeable deficit, which raises the question of what savings you need to have today to purchase a house in Spain.
Savings volume and mortgage loan
Realistically looking at the situation, it should be indicated that at the moment the most likely way to purchase housing will be related to the use of mortgage lending. Usually banks lend funds to cover, at most, 80% of the value of real estate.
These 80% can be counted from the estimated value or from the total purchase price. Thus, it is necessary to count on the fact that the buyer will need to cover at least 20% of the housing price. To this should be added funds for related expenses, including fees, taxes, payment of specialists and real estate appraisals. This usually results in an additional 10-15% of the price of the object.
Thus, if a person wants to buy a property worth, for example, 300,000 euros, he must have at least 90,000 euros of savings, that is, 30% of the total cost of the purchased housing. Of course, it is necessary to have funds on top for monthly repayment of mortgage payments.
In relation to the latter, it is usually recommended to take credit obligations, monthly payments for which will not exceed 30-35% of monthly income. Otherwise, the borrower will be in a very vulnerable position and at risk of having to turn to less secure ways of obtaining money to cover expenses.