Getting a Mortgage in Spain.
- Apply for a mortgage in Spain with peace of mind.
- Independent advice with only your interest in mind.
- Your trusted Spanish lawyers for all your legal matters in Spain.
Getting a Mortgage in Spain
There are some differences when it comes getting a mortgage in Spain compared to the United Kingdom.
Probably, the main difference has to do with repayment methods. Whereas in UK, the client of a fixed rate mortgage locks the interest rate for a short period (usually 2 to 5 years), in Spain the commitment if for the duration of the mortgage.
Also, it’s important to understand the advertised rates when doing research, as they tend to show an attractive rate but that will be on top of the EURIBOR (similar to the UK LIBOR). It’s important to consider that the loan-to-value might vary depending on your residence situation or the tax implications.
We can help you get your mortgage in Spain
Dealing with your property or interests on your own can be overwhelming. If your are looking at properties in a foreign country you need all the legal help you can get.
The first thing we’ll do is have a proper understanding of you specific circumstances (the type of property you are interested, your residence and financial status…). Some institutions have some specific products depending on these variables. Based on that we’ll scout the market and come back to your with just the options that suit you. Then, we will help you decide and go through the mortgage process with you and submit the application for you.
Do you need to get a mortgage in Spain?
At IgnitIUS we guide you through the process and give you all the advice you require. We will even set up an appointment with the notary and make sure you have all your documentation ready.
If you are considering purchasing a property in Spain, getting a mortgage is likely an important step in the process. Obtaining a mortgage in Spain can be a complex and challenging process, like in the UK, but the rewards of owning a home in this vibrant and beautiful country are worth the effort. In this article, we will discuss the steps you need to take to secure a mortgage in Spain. We’ll cover the different types of mortgages available, the criteria for eligibility, and the documents you will need to provide. We’ll also discuss the different lenders and the process of applying for a mortgage.
Steps for taking a mortgage in Spain
At a glance, the steps for getting a mortgage in Spain are similar to the UK:
- Research the Spanish mortgage market and compare different lenders and products.
- Calculate how much you can afford to borrow and what type of mortgage best suits your needs.
- Gather the required documents, including proof of income, bank statements, proof of address, and proof of identity.
- Submit your application to the chosen lender for review.
- Wait for the lender to approve your mortgage application.
- Sign the mortgage contract and pay any associated fees.
- Receive the funds from the lender and use them to purchase your property.
Mortgages in Spain for non-residents
The main difference between residential and non-residential mortgages usually is the maximum loan-to-value (LTV) that banks will give access to. Residents can generally borrow up to 80% of the property’s value and a slightly better interest rate, whereas non-residents generally get access to 60–70% LTV, depending on different factors. The average mortgage term for non-residents is between 15 and 20 years.
For this reason, you may want to consider an investor visa, which can give you access to a better deal. But there are some tax considerations as well. We can advice you on the best option for you depending on your circumstances.
Types of Mortgages in Spain
As in the UK, aside from some specialised products, the main mortgage types are fixed-rate and variable-rate mortgages:
- Fixed rate: the buyer will pay the same interest throughout the duration of the contract. This might provide stability and peace of mind and tends to be a good option when interest rates are historically low.
- Variable rate: the buyer pays a combination of a fixed rate and the value of the EURIBOR, which is variable,
The main consideration is that the commitment is for the duration of the contract as opposed to locking a rate for 2 to 5 years like in the UK. Changes to the terms and overpayments carry some extra fees.
Criteria for Eligibility
As a UK citizen, you do not need a special visa in order to get a mortgage in Spain. However, you may need to obtain a Spanish residency permit if you plan to stay in Spain for more than three months. Also, having a Spanish residency might help you get a better deal for your mortgage.
The general criteria are:
- Must be over 18 years of age.
- Valid passport from your home country.
- Having a good credit history.
- Stable source of income.
- Minimum deposit of at least 10-30% of the property value.
- Two years of work experience in your home country.
- Proof of sufficient funds to cover the mortgage payments.
Documentation
Your lender might have specific requirements but you should have the following ready:
- National identity document or passport
- Foreigner’s ID number (NIE)
- Proof of address (recent utility bill, bank statements, etc.)
- Purchase contract (if available)
- Proof of deposit.
- Proof of other sources of income
- Credit Report (In Spain banks will have you sign an authorization to retrieve your CIRBE from the Central Bank of Spain)
- Bank statements for the last 6 months
- Last mortgage statement (if applicable)
- Nota del registro (if available)
- Declaration of assets (properties, land registry certificates)
Employees:
- 3 last pay slips
- Last Tax return (Last P60 for UK or Declaración de la renta for Spain)
- Employment contract.
- Letter from the Company (the Company letter must indicate the type of contract, seniority, annual salary, and position of the employee).
If you are self-employed:
- Last 2 years Tax return (SA302 for UK)
- Annual Accounts for the last two years
- Accountant’s Certificate stating income information and occupation (from Chartered accountant)
What banks offer mortgages in Spain for non-residents?
The main banks in Spain offer specific mortgages for non-residents:
