Rent in the Canary Islands is 218 euros more per month than a mortgage

Buy or rent? That is the dilemma that many people face when looking for a home. Currently, in the Canary Islands, it is more profitable to buy a house and get into a mortgage than to rent it, despite the rise in interest rates and the rise in the Euribor in recent months.

According to a new report carried out by the Hipoo mortgage brokerage platform, mortgage repayments are an average of 218 euros cheaper per month than renting here in the islands.

With this difference, which is primarily due to the rise of rental prices over the last year, the Canary Islands is among the three regions of Spain with the biggest difference between buying and renting.

In their report, Hipoo has analysed the current square metre prices for both renting and buying a home, and the latest data, from October, stands at 2,061 euros/m2 on average in the Canary Islands.

Hipoo has taken this data and applied it to a property of 75m2, which means its value would be 154,575 euros. Assuming that 100% financing is needed, the value of the simulated mortgage payment with a fixed interest rate of 3% over 30 years, would be approximately 652 euros per month.

As far as renting is concerned, the average comes out at 11.6 euros/m2, which again comes from October’s data. This means that the price to rent a 75m2 property is 870 euros per month, making it 218 euros more expensive per month, or 2,616 euros per year.

"The end result is clear, the total savings would amount to 218 euros per month, and that is based on a 100% mortgage, in reality, the gap is wider when it is for 70 or 80%," says César Betanco, from the Hipoo mortgage broker, who concluded that we’ll have to wait and see what happens with interest rates in 2023 and what effect that has on both mortgages and rentals.