Spanish Mortgages

Loan to Values

Standard loan to values are up to 80% for non-resident Spanish Mortgages and are always linked to the valuation of the property in Spain not the purchase price.

Most Spanish mortgages whilst linked to a percentage of valuation cannot exceed the price declared on the Escritura (title deeds).

Spanish Mortgage Product Ranges

Spanish mortgages are predominately linked to a variable rate and on a repayment basis. Spanish variable rate products are generally linked to the yearly euribor (European inter bank offered rate) and your interest rate will be reviewed yearly. Your interest rate for the first 12 months is determined by the euribor at the month of completion plus the fixed margin above that which your selected Spanish bank is charging. Some offshore banks can provide mortgages in sterling secured against your Spanish property purchase, linked to the Bank of England base rate.

There is growing access through banks in Spain to Interest only terms and fixed rates. Fixed rates unlike the UK tend to be slightly higher than the prevailing variable rate.

Equity Release and Re-mortgaging in Spain

Releasing equity and re-mortgaging in Spain is only available through certain lenders. Not all banks will provide this facility. Because of the legal process of securing a mortgage in Spain it is more difficult and costly to make any changes to your Spanish mortgage post completion.

Raising funds against an unencumbered Spanish property, releasing further funds or changing the terms is controlled by the Bank of Spain and further tax; bank and notary costs will apply. In Spain under the current legislation it is advisable to raise the maximum funding you require for your current and future needs. Lender, product and rates need to be carefully selected to ensure they are the most suitable for your needs. Lender and product hopping, which is now standard practice in the UK, is not advisable in Spain without careful planning and advice. Lifetime mortgages for retirees are also available and further information can be found on our lifetime loan page

Term

Spanish mortgage terms range from 5 to 40 years, are dependent on age and Spanish finance provider selected. Most Spanish banks will expect the mortgage to be repaid by age 70 but it is possible to obtain a mortgage in Spain up to age 80.

Costs

All Spanish banks charge an arrangement fee for dealing with your mortgage in Spain. Spanish bank opening fees are payable at completion. All other costs in relation to the Spanish mortgage deed including mortgage tax, registry costs and some of the purchase deed costs are deducted from your gross mortgage advance. It is not possible to add your costs to the Spanish mortgage unless your valuation level allows you to. It is important to check you have accurately assessed and accounted for all expenses to ensure you are not left short of funds for completion day. We would suggest you allow at least 12% of the purchase price to cover your purchase and finance costs in Spain in full and that you make sure you are made fully aware of the provision of costs for completion by your lawyer.

Currency

If you take a Spanish mortgage with a mainland Spanish bank the capital provided and repayments will be in Euros. Offshore lenders can also take security over your Spanish property and many will provide the funds and take repayments in any major currency of your choice. Your interest rate will be linked to the base rate of the currency you select. For most Euro mortgages this will be the yearly euribor.

Underwriting Criteria

Most mortgages in Spain are only granted on a full status basis. IMS have access to limited documentation products but full self certified mortgages are not currently available. Most Spanish banks will assess your income net of tax and will want to see that the combined existing UK and new Spanish monthly liabilities do not exceed 1/3rd of your proven monthly net income. It is possible with some banks to extend this ratio to 45% of net income and each bank in Spain will underwrite in a slightly different manner. Rental incomes in Spain may be taken into account on a case by case basis. There are no specific "buy to let" products currently available.

Standard Non-resident Document Requirements for Spanish Mortgages

Employed Applicants

3 month's payslips

P60

3 month's bank statements

Employer's reference

Copy of Passport

UK Credit File

Self Employed

Self assessment tax return

Accountants reference

3 months bank statements

Copy of passport

UK Credit File

Resident Document Requirements

Employed

Contract of employment stamped by social security

Vida Laboral

La Renta

3 month's nominas

Bank reference

UK Credit File

Self Employed

Certificate of Autonomo or Escritura for SL

Gestor reference

1 to 2 years Profit and Loss accounts

La Renta

Last 3 quarterly IVA returns

3 months bank statements

UK Credit File

Spanish Mortgage Info

Spanish Mortgage Products

Want to buy in Spain, but not a resident? Find out about our Spanish mortgage products.

Buyers Guide

Be prepared... the Spanish purchase and finance process is more complex than in the UK.

Spain FAQ

Spanish mortgage FAQ

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