Lately, I’ve seen many people on the forum discussing mortgages and consumer loans. As it happens, I recently went through the whole ordeal myself, dealing with several banks, and I wanted to share my experience to hopefully help others in the same boat.
My Loan Background
To give you some context: I work in Madrid with a stable employment contract and was looking to get a mortgage for my first home. Since everyone’s income, contract type, and down payment situation is different, the bank’s assessment will vary. So, please take my experience as just a reference, as it may not apply to everyone.
A Comparison of Major Banks
I primarily dealt with the three major traditional banks: Santander, BBVA, and CaixaBank. I also looked into online banks like ING.
Santander
My impression of Santander is that it’s a massive, well-established institution with a full range of products, but its approval process is quite traditional and strict. They place a huge emphasis on your ‘vinculación’ (your relationship and product ties with the bank), such as having your salary paid into an account with them, holding their insurance policies, your credit card usage, and so on. If you’re a long-time customer, things are much easier. However, for new customers, the barrier to entry can feel high, and the interest rates they offer tend to be conservative and not particularly competitive.
BBVA
BBVA feels a bit more modern in comparison; their mobile app is excellent. Their loan approval process seems slightly more flexible than Santander’s. They also value linked products, but they offer a wider variety of loan packages. When I spoke with their manager (gestor), they seemed very professional and clearly explained all the various possibilities, even down to details about the IBAN. However, to get the best interest rate, you still need to bundle several products, such as pension plans, home insurance, and life insurance. It’s crucial to calculate the total cost of these bundles.
CaixaBank
CaixaBank is the undisputed king of physical branches; it’s incredibly easy to find an office. However, this is also where I found their process to be the slowest, possibly due to the sheer number of customers. After submitting my documents, I had to wait a long time for a response. Their main advantage is that if you live in a smaller city or town, their branch might be your only option. Their interest rates are average, and they also require bundling plenty of products. I personally think they are a good fit for people who aren’t comfortable with online banking and prefer face-to-face interaction with a bank manager.
Online Banks and Other Options
Besides the major traditional banks, digital banks like ING and Openbank are also worth considering. Their advantages include low fees, transparent processes, and the ability to complete most procedures online. ING’s ‘Hipoteca Naranja’ (Orange Mortgage) was particularly famous for a while because it didn’t come with many mandatory bundled products. The downside is the lack of physical offices; all communication is done via phone or online. If you run into a complex issue, such as needing a bank code lookup, you might feel a bit lost. Furthermore, their qualification screening is very strict, and they typically prefer ‘perfect’ customer profiles.
| Bank Type | Pros | Cons |
|---|
| Major Traditional Banks | Many branches, wide range of products, face-to-face service | Slow process, many bundled products, less friendly to new customers |
| Online Banks | Competitive rates, low fees, fast process | No physical branches, communication can be difficult, strict screening |
There’s no single best bank, only the one that’s best for you.. My advice is to shop around and ask several banks! Don’t be afraid of the hassle. Take your documents, schedule meetings with different banks, and ask them for a FIPRE (Pre-contractual Information Sheet). Then you can go home and compare them carefully. Sometimes, the bank where you’ve had your salary account for years won’t necessarily give you the best offer. I hope this rundown of my experience is helpful, and I welcome everyone to share their own experiences too!
