why spain | find your property | lettings | mortgages | residency

Financing your purchase

There are a number of ways you can finance your purchase over periods of up to 20 years. Since the lifting of exchange controls non-residents can now take out a mortgage on Spanish property.

Many leading international banks and former building societies now offer mortgage facilities on the purchase of Spanish homes. Depending on status and the value of the home, you can normally borrow up to 70% of the value of the property.

Most Spanish banks will offer mortgages to foreigners, but at a slightly higher interest rate. Some UK banks based in Gibraltar will offer up to 65% as a second mortgage on your property in UK.

You may be offered finance by the developer of your chosen complex. There are dozens of schemes, and you should study each one with care. The contract should stipulate the down payment; count subsequent payments and state when the payments end. This will show you just how much the developer's financing will cost you.

The four main sources open to you if you are taking out a mortgage are: -

1. Mortgage from an offshore holiday home loan specialist e.g. Bank/Building Society

2. Mortgage/Loan from a bank in your country of origin

3. Spanish Bank Mortgage, much easier if you are a foreign 'resident' of Spain.

4. Builder's Mortgage, offered by some developers to increase sales on new complexes.

Financing your property

If you require finance to purchase your home in Spain with a Spanish mortgage:
Interest rate: The mortgage rate at present is 4.95% (January 2002)
There are very few criteria to meet to be eligible for a mortgage.

1. You must be able to show that you have a sufficient income to meet the repayments.

2. The repayments chosen period must expire before the borrower's 75th birthday.

3. You may borrow up to 65% of the total required to purchase your home.

REPAYMENT PERIODS ARE 5, 10 OR 15 YEARS.

To apply for a mortgage:

For self employed:
The bank needs to view the last 2 years accounts and tax statements.

For employed:
You will need to provide your last 6 months payslips and the last P60 received from your employer. The banks also want to see details of the total household income for the borrowers.

Mortgage example:
House price: 192.000 euro (£120,000 converted at a rate of 1.6 euro to £)
Mortgage amount: 96,000 euro (50%) (£63,576 converted at a rate of 1.51 euro to £)
Interest rate 4.5%
Repaid over 15 years 742.67 euro per month = approx. £491.83 per month

Costs of the mortgage:
House valuation Survey: 200 euro (£132.45 converted at a rate of 1.6 euro to £
Mortgage set up fee (approx. 2% of the amount of the mortgage) approx.. £1,271.52
Notary fee to register the mortgage approx. £750.00

top of page