Renting a home in Spain has become increasingly expensive, but buying one is hardly an easier alternative. The average monthly mortgage repayment has now climbed to almost €860, swallowing more than a third of the average salary. In the Balearic Islands and Madrid, the situation is even more alarming. For a growing number of people, owning a home is becoming a luxury they simply cannot afford.
Spain Expat Press Editorial Team
For years, buying a property in Spain was seen as a sensible alternative to paying ever-increasing rents. Rather than spending hundreds of euros each month on a landlord’s property, many families preferred to invest in a home of their own.
But that option is becoming increasingly difficult.
Property prices continue to rise, borrowing has become more expensive and wages are struggling to keep pace. What was once an achievable ambition for many Spanish families is now turning into a considerable financial challenge.
Almost €860 a month just to pay the mortgage
According to the latest figures published by Spain’s Association of Property Registrars (Colegio de Registradores), the average monthly repayment on newly arranged mortgages reached €857.60 in the third quarter of 2026.
That represents an increase of around 9% compared with the same period last year. In just three months, the average monthly repayment rose by a further 4%.
Perhaps even more concerning is the proportion of income now needed to service a mortgage.
Monthly repayments account for an average of 35.3% of earnings, compared with 34.3% a year earlier.
And that is before taking into account electricity, water, insurance, community fees, property taxes and the many other expenses associated with owning a home.
For households already struggling with the rising cost of living, the financial pressure is becoming increasingly difficult to manage.
Property prices are breaking records
The main driver behind the increase in mortgage repayments is the relentless rise in Spanish property prices.
During the third quarter of 2026, the average price of residential property reached €2,512 per square metre, an increase of 9.3% compared with the same period in 2025.
At the same time, the average mortgage loan reached a record €179,466.
In practical terms, buyers now need larger deposits and must often borrow considerably more than they would have needed just a few years ago.
Higher borrowing costs are adding to the pressure.
The average interest rate on newly arranged mortgages increased from 2.99% to 3.15%, making monthly repayments even more expensive.
The combination of record property prices and higher interest rates is particularly challenging for younger buyers, families and households on middle incomes.
Balearic Islands and Madrid: Home ownership is becoming a luxury
The figures reveal enormous differences between Spain’s regions.
The Balearic Islands are the most expensive place to finance a home, with average monthly mortgage repayments reaching €1,510.50.
Madrid follows closely behind at €1,354.30 per month.
Both regions also have some of the highest property prices in the country, averaging €4,565 per square metre in the Balearics and €4,502 in Madrid.
Catalonia is another expensive market, with average monthly mortgage repayments of €916.50, while the Basque Country stands at €858.40.
At the other end of the scale, Extremadura remains considerably more affordable, with average repayments of €477.70.
Murcia and La Rioja also remain below €600 a month, at €565.70 and €579.60 respectively.
The figures illustrate just how divided Spain’s housing market has become, particularly between major cities, sought-after coastal destinations and less densely populated regions.
Rent or buy? For many, neither is affordable
For an increasing number of people in Spain, the housing market presents an uncomfortable dilemma.
Renting is expensive, available properties are scarce in many areas and competition among prospective tenants can be fierce.
Buying, meanwhile, requires substantial savings for a deposit and the additional costs associated with purchasing a property.
And even those who manage to save enough money must demonstrate that their income can comfortably cover the mortgage repayments.
For younger generations, getting onto the property ladder is becoming particularly difficult.
Having a stable job and a regular salary no longer necessarily guarantees access to a mortgage.
There is another important point: an average monthly repayment of €860 does not mean that a buyer can finance a property for that amount everywhere in Spain.
In popular coastal areas and major cities, the actual cost can be significantly higher.
For many households, the choice is no longer simply between renting and buying. It is about whether either option is financially realistic.
And there is little sign of relief
Spain’s property registrars have warned of a further significant deterioration in housing affordability.
Their latest report suggests that the situation could continue to worsen if property prices and borrowing costs maintain their upward trajectory.
Longer mortgage terms may help reduce monthly repayments, but they generally mean paying more interest over the lifetime of the loan.
Higher wages could also ease the pressure, although salary growth has so far failed to compensate for rising housing costs.
The result is a housing problem that extends well beyond the rental market.
For years, much of the public debate in Spain has focused on soaring rents, the shortage of affordable rental accommodation and the difficulties facing tenants.
But the latest figures highlight another reality: purchasing a home is becoming increasingly unaffordable too.
Spain no longer has just a rental affordability problem. It has a much broader housing affordability crisis. And for a growing number of people, whether renting or buying, simply having a place to call home is becoming a luxury.
