Mortgages in Spain

Getting a mortgage in Spain is subject to the same checks as getting one in your home country.  You will be asked to give proof of your income and other financial details and your property will be subject to repossession if you don’t keep up the payments.

There are many banks in Spain offering mortgages, both Spanish banks and UK banks with branches in Spain.  It’s always a good idea to shop around for the best deals and negotiate on rates, just as you would in your home country.  If you’re dealing with a Spanish bank and don’t speak fluent Spanish most have at least one member of staff of managerial level who can speak English. 

When paying a mortgage on a Spanish property you should consider where the funds will come from to make the repayments.  If you have to transfer UK income each month you will have to pay the cost of the euros.  Also if the exchange rate changes dramatically (as has happened recently) you could find yourself paying much more each month than you originally anticipated.

Another cost if you transfer money from your home country to a Spanish bank is the charge made by the bank.  Some UK banks in Spain offer a free transfer service between countries, although there may be minimum balance requirements.

If you are transferring a deposit for a property purchase from a foreign bank account to Spain you will also be at the mercy of the exchange rate.  There are some companies in the UK that will ‘forward buy’ currency for you at the time when the exchange rate is at its best, however, they charge a fee and you are in their hands as to what rate you receive.  These currency dealers get better rates than the banks because they buy such large amounts of currency.  Only use reputable companies if you plan to buy currency this way as you are entrusting large amounts of money to a third party.

Looking for a Spanish mortgage?
Mortgage Direct offer a professional, straightforward service with no hidden costs.  If you require a mortgage in Spain  or Spanish mortgage, contact Mortgage Direct.With access to every Spanish mortgage product, Mortgage Direct can offer unique mortgages in Spain, tailored to your specific requirements.

They work with all Spanish and UK banks, as well as the offshore banks in Gibraltar, giving you access to every mortgage option.

With interest rates as low as 2.1% and Spanish mortgage terms from 5 to 40 years, now is a great time to arrange your Spanish mortgage with Mortgage Direct.

Contact Mortgage Direct for further information or get a no-obligation personalised quotation.





Spanish Mortgages
These are the most frequently asked questions we receive about Spanish mortgages which have been answered by Mortgage Direct.

Why choose Mortgage Direct?
As independent mortgage brokers, we have access to a wide range of lenders, many of which have specialist schemes and special deals.  We provide guidance on the legal and technical aspects of property purchase in Spain and review all the available financial options to ensure that you are fully informed when making such an important decision.

How much can I borrow?
In general, we can arrange a Spanish mortgage up to a maximum of 70% for non-residents and 80% for Spanish residents (usually this is of the lower of purchase price or valuation). There are considerable differences between lending abroad and raising finance in the UK. Whilst the UK system applies income multiples (e.g. 3 x your gross income) the European method is based on your ability to repay the loan.

Most European banks lend on the basis that your total monthly repayments (capital and interest) should not exceed between 35% and 50% of your net monthly disposable income.

How much will it cost?
As a general guide, the cost associated with the purchase of a property is approximately 12%. This can vary depending on factors, such as whether the property is second-hand or a new build. Our systems can calculate the cost more accurately by using information on the property value and Spanish mortgage required.

How long does it take?
Each individual case is different however, you should allow between four and six weeks from mortgage application to the funds being available. Why not complete a quotation request CLICK THE BANNER ABOVE.

Obtaining a no-obligation Spanish mortgage quotation will give you a clear picture of how much you can afford to spend on a property. Armed with this knowledge when searching for a property will save you time, money and frustration and assist in eliminating costly delays, the potential for losing your property, your cash deposit and gazumping.

Can I have a buy-to-let Spanish mortgage?
Buy-to-let Spanish mortgages are now available as a specific product in the Spanish market, although the affordability calculations are based on a client’s net income after tax and not the future rental income of the property. For this reason alone, these new products aren’t nearly as attractive as they sound. Mortgages can be arranged that allow existing rental income to be taken into account when working out how much you can borrow, but this has to be coupled with a client’s employed or self-employed income (that isn’t property related).

Can I have a Residents Mortgage?
You will normally need to be living and working in Spain to obtain a residents mortgage. Lenders require you to reside in Spain for a minimum of 6 months to qualify, but more typically 1 year. These mortgages will typically allow loans of 80% or more of the value of the property with terms up to 40 years.

Can I Re-mortgage?
Due to the costs and government taxes in re-mortgaging we advise our clients to obtain the most suitable mortgage for their needs for the term of the loan. Re-mortgage costs can typically be 4-5% of the loan amount. Mortgage Direct is able to offer re-mortgage and equity release products with minimum costs or even fees free, including lenders fees and valuations. We can make a no obligation check to see if a re-mortgage is a suitable and viable option.

What about Developers Mortgages?
We always recommend you check the details and costs of the mortgage offered to you by a developer. Typically the developer can subrogate (transfer) the existing loan on the property to the buyer. However, the development will have the same mortgage product for each property – which may not be suitable for all purchasers. We offer a no obligation search against the whole of the Spanish non-resident mortgage market to ensure you are able to select the most appropriate mortgage product for your needs.

What supporting documents are required for a Spanish mortgage?
As a basic guideline the following documents are required to verify your income:
* A copy of your last P60
* Copies of your last 3 payslips
* Copies of your last three months’ bank statements
* Experian report (credit agency reference confirming if you have any debts)

If you are self-employed you will need:
* Copies of the last two years’ annual accounts
* Copies of the last two years’ Income Tax Calculations issued by the Inland Revenue
* Copies of the last three months bank statements
* Experian report (credit agency reference confirming if you have any debts)

This is not an exhaustive list and additional documents may be required. Also, Spanish mortgages are available that require less documentation.

Got another question?
For further information use the form below or to get a no-obligation personalised quotation click the banner above.