Spanish Mortgages

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The first thing to remember is that mortgages in Spain are attached to the property and written into the escritura, or title deed. They tend to be expensive to set up with administration fees of up to €1,500 to €3,000 (£1,00- to £2,000) being the norm. On the other hand many properties, especially new ones already have a mortgage attached to them (this is a common way for a developer to finance construction) and you can simply take this over, avoiding the need for set up fees. Spanish banks will usually lend non-residents around 60% and residents around 80% of the declared value of the property, secured against the property in Spain or your property in your home country. As in the UK, the amount that a bank will willingly provide is dependent upon your income and financial status.

It should also be taken into account that as a rule, a mortgage for a Spanish property cannot be taken out for a period exceeding 20 years. Therefore, this should be factored in when calculating monthly payments. Certain banks are also only able to offer financing for customers residing in Spain or intending to move there, and not for holiday homes.

As in the UK, you’ll be required to provide proof of identity and proof of earnings, typically by supplying your last three salary slips, recent bank statements, a copy of your passport and sometimes a letter of reference from your employer. If you are self-employed, you’ll need to provide the last few years of your accounts, a report from your accountants, most recent tax return, recent personal bank statements and a copy of your passport. It may also be necessary to check that the property is registered as ‘vivienda’, which signifies that it is a habitable dwelling.

You will also need to provide the bank with a copy of the offer letter or sales contract (‘Conrato privado de compravent’) and a ‘Nota simple’ from the property registry, which identifies what, if any, debts are attached to the property.

An advantage of taking out a Spanish mortgage to finance the purchase of your property, is that they are often quicker to set up and complete than those arranged in the UK. Banks in Spain also often benefit from lower mortgage interest rates, often at around 3%, compared to almost double that on average in the UK.

 From in your country of residence

You may find it easier and initially cheaper to take out a mortgage with a bank in your current country of residence, as many mortgage lenders in the UK boast a wider range of mortgage schemes and lower set up charges. Be aware though, that exchange rate fluctuations can have a significant impact on your mortgage repayments as the value of the Euro rises and falls, and not all UK banks offer mortgages on Spanish property.

Another option to consider is taking out a re-mortgage on your existing property. If there is enough equity available, this can be a less complicated option, as it is easier to arrange and would result in only one monthly payment

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