Mortgages in Spain

The information below is a more detailed look at how mortgages work in Spain and an overview of the amount of money that banks tend to lend people.

Non Resident Mortgages

  • Euro notesNon-residents can borrow up to 60% of the valuation of the property. Some banks will however restrict the borrowing to a percentage of the purchase price.
  • The length of the mortgage can be up to 40 years although the usual term is up to 30 years.
  • The standard rate of interest is variable but we can also offer fixed rates which are generally higher and a mixture of both fixed and variable is also available.
  • Mortgages can be either Repayment mortgages (both capital and interest) or Interest only or a mixture of the two. The Interest Only can either be a mixture where the interest is paid over a fixed period of the mortgage with the capital being repaid over the remaining term or for the whole term of the mortgage where the capital is repaid at the end of the term.
  • Loans are available for borrowers up to the age of 75 but can be to an unlimited age.
  • Remortgages are available.
  • Mortgages on Rustic property up to 50%.
  • Loans can be taken out in both an individual or Company name.

Resident Mortgages

  • Residents are able to borrow a higher percentage than non residents.
  • However, the percentage available is based on a number of factors and the normal loan to value ratio is up to a maximum of 70%.
  • Term can be up to 50 years.
  • There are tax benefits available for younger, first time buyers.
  • Change of house product which gives you more time to sell your previous property.
  • If buying in joint names, both parties have to be resident to benefit from these offers.

Self Build Project

  • Banks tend to look at these applications on an individual basis. They will require the presentation of complete documentation on both the individual and the project.
  • Non residents should already own the land and ALL building licences and any other permissions required must be obtained for presentation to the lender.
  • Residents can also finance the land as well as the project.
  • The loan is normally drawdown over the period of construction with an initial interest only period (up to a maximum of 36 months).

Commercial Loans (for small businesses)

  • Banks typically lend a lower amount than residential mortgages for the purchase of commercial premises.
  • The term of a commercial loan tends to be fairly short normally, not more than 15 years.
  • Trading accounts are required if an existing business is being purchased.
  • Banks prefer applicants to have experience in a similar business, whether in Spain or the UK.
  • Proof of additional income sources may be requested to ensure repayments can be made while the business is being developed.
    Full documentation is required, including cash flow projections, details of all the applicants involved, and projections for income and expenditure.
  • Rates are slightly higher than residential mortgages and all the terms and conditions are individually negotiated case per case.