The instalment and the interest are two different calculations
A French-system mortgage — the standard in Spain and most of continental Europe — has a level instalment. It is fixed once, from the amount borrowed, the nominal annual rate (TIN) and the number of payments, using the annuity formula. Nothing about that formula knows what a calendar looks like: it divides the annual rate by twelve and assumes every period is identical.
The interest actually charged in each period is a separate calculation, and it does look at the calendar. The lender takes the outstanding balance, multiplies by the annual rate, and prorates it over the real number of days since the last payment, divided by the real length of that year. On a 250,000 € balance at 2.85 %, a 30-day period inside a leap year costs 250000 × 0.0285 × 30 ÷ 366 = 584.02 €, while the following 31-day period costs more even though the balance has gone down.
The instalment is what does not change; the split between interest and capital is what moves. Because the interest is deducted from a fixed instalment, everything the calendar does to the interest lands on the capital repaid. That is why two mortgages with the same headline numbers can end up hundreds of euros apart, and why a schedule built on 'rate divided by twelve' quietly disagrees with the one your bank sends you.
Cutting the term versus cutting the instalment
When you repay capital early, Spanish lenders let you choose what the money buys. Cut the term and your instalment stays exactly where it is, so the same monthly payment now covers less interest and more capital, and the loan simply ends earlier. Cut the instalment and the horizon stays where it is, but the payment is recalculated over the balance that remains and the payments still outstanding, so every month from then on is cheaper.
Cutting the term almost always saves more interest, and often by a wide margin, because it removes the most expensive periods — the ones at the far end where you would still be paying interest on whatever balance was left. Cutting the instalment saves less in total but improves your monthly cash flow immediately, which matters if the household budget is tight or if you expect income to fall. Neither is universally right; the point of running both is to see the size of the trade-off before you commit.
Why one day either side of the rate review is not the same
Two separate mechanisms make timing matter, and they pull with different strengths.
The first is simply days of interest. Money you repay on the 5th stops accruing interest on the 5th; money you repay on the 20th accrues for fifteen more days. On a 20,000 € overpayment at 3 %, that fortnight is worth roughly 25 € — small, but always in the same direction: earlier is never worse.
The second is the recalculation itself, and it is the bigger one. On a variable or mixed mortgage, the lender resets the instalment at each review from the balance it sees on that date. Land a lump sum before the review and the new instalment is computed on the reduced balance, so every payment for the rest of the loan is lower. Land it a day after and the instalment was already fixed on the higher balance; the overpayment still helps, but it is recalculated against a shorter remaining term, which changes the shape of the saving rather than simply increasing it. Depending on the rate direction and the mode you chose, the totals can come out surprisingly close — which is exactly why the tool computes all three dates rather than repeating a rule of thumb.
What an early repayment is allowed to cost you
Spain's Ley 5/2019 caps the compensation a lender may charge for repaying early, and the cap depends on the type of rate. On a fixed-rate loan, or on the fixed stretch of a mixed one, the ceiling is 2 % of the capital repaid during the first ten years and 1.5 % afterwards. On a variable-rate loan the lender chooses one of two schemes when the contract is signed: 0.25 % during the first three years, or 0.15 % during the first five — and nothing at all after that window closes. In every case the fee is also capped by the lender's actual financial loss, so it is frequently zero in practice. Check your deed for which scheme applies before assuming a number.
The instalment is not what the house costs
Interest is the largest single line, but it is not the only one. Buying costs tax — ITP on a second-hand home, VAT plus stamp duty (AJD) on a new build — along with notary, land registry, agency and appraisal fees, and sometimes an arrangement fee on the loan itself. Owning costs home insurance, usually life insurance if the lender required it, property tax (IBI), the service charge, and maintenance that averages out to a real number over thirty years even though it arrives in lumps. Adding all of it to the repayments is the only way to see what the home costs per month, all in — a figure that is typically a third higher than the instalment alone.
