The real estate market has experienced significant growth since the beginning of 2025, driven by low mortgage rates and concerns that property prices will continue to rise for an extended period. According to the College of Registrars of Spain, during the first half of 2025, 352,703 purchases of homes were registered in the country, marking an impressive 18.5% increase compared to the same period in 2024.
However, this market dynamism has a darker side. Analysts from the financial comparison platform HelpMyCash.com warn that the lower cost of financing, combined with the increase in home prices, may lead many individuals to purchase homes that they cannot truly afford. To avoid this pitfall, analysts advise potential buyers to accurately calculate their mortgage and evaluate how much money they can dedicate to acquiring a new home.
1. Evaluate How Much You Can Contribute as a Down Payment
Firstly, HelpMyCash analysts recommend that buyers check their bank account balances. Having savings is essential for securing a mortgage. Typically, banks finance up to 80% of the purchase price of a home, which means the buyer needs sufficient personal funds to cover the 20% down payment and an additional 10% for associated costs with the purchase (such as taxes, notary fees, registration, etc.).
For example, let’s say a couple wishes to buy a home and has saved around €60,000 to cover the down payment and associated costs. With this amount, they could afford a property priced up to €200,000, which includes a down payment of €40,000 and a purchase cost of €20,000.
However, some banks may finance up to 90% or even 100% of the purchase if the customer’s profile is favorable, especially if they utilize a mortgage broker. In such cases, buyers only need enough savings to cover the property transaction costs (about 10% of the home’s price) and any portions not covered by the mortgage.
2. Calculate What Home You Can Buy with Your Salary
However, the value of the home one can afford doesn’t solely depend on savings; it largely depends on income as well. In this regard, institutions like the Bank of Spain recommend that no more than 30% of one’s income be devoted to paying mortgage installments and other debts.
With that cap in mind, buyers can take advantage of tools like the HelpMyCash maximum house price simulator to find out how much they can afford for a home. This calculator considers the user’s salary to determine which property could be purchased with an 80% mortgage at average terms and interest rates.
For instance, assume a couple has net monthly earnings of around €3,800 with no ongoing debts. According to the calculations performed by the comparator, the maximum price they could afford for a home would be approximately €338,000, with a mortgage of about €270,400 requiring a monthly payment of €1,140.
3. Be Careful with Loan Discounts
Lastly, the comparison platform highlights a crucial aspect often overlooked: mortgage discounts. Generally, to secure a competitively priced mortgage, it’s necessary to engage in additional banking products that can incur costs, such as insurance, credit cards, and pension plans. Failure to take these subscriptions will typically result in a higher interest rate as specified in the contract.
Therefore, before accepting a mortgage offer, it’s vital for the client to crunch the numbers to see if they can afford the cost of these associated products. If they choose not to subscribe, they should assess whether the monthly payment remains less than 30% of their income following any interest rate increase. These calculations can be easily performed using the HelpMyCash mortgage payment simulator.