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Mortgages and Other Financial IssuesBack to top Back to main Skip to menu
Spain - Mortgages and Other Financial Issues
Some people choose to re-mortgage an existing property they own which would then mean not having to deal with Spanish banks but factoring differing interest rates and currency conversion charges this may not always be the most cost effective or simplest option. Many people choose the option of mortgaging through a Spanish bank or one of the many Spanish mortgage providers available.
Spanish banks will normally only lend between 60 and 70 per cent of the sales value of the property if the buyer is a non-resident of Spain. Residents of Spain will be able to borrow more. An independent valuer will be sent from the bank to assess the value of the property. This assessment will be charged to you but will be included in the mortgage application charges. Again these charges vary depending on the value of the property and also the banks as different banks have varying fees. These fees can often also be negotiated. It can often be worth checking with different branches of the same bank as the mortgage products available will vary. If you get a mortgage offer with one bank you will find that another bank will happily undercut it for you.
Once the application has been submitted these charges will need to be paid. In order to qualify for a mortgage you must be able to meet certain criteria. You must be able to prove you have a sufficient income in order to cover the mortgage and running costs of the home, you will be asked to produce pay slips or proof of income such as accounts for the self-employed or bank statements. You will also need to supply a tax declaration from your home country if you are a non-resident of Spain. You must also have a life insurance policy to cover the mortgage terms. This is a compulsory requirement and cannot be negotiated.
To find out how much mortgage you can afford it is best to seek professional advice. Contacting a Spanish mortgage lender such as a bank is the easiest way, they each have their own criteria and fees and will give you an idea of what to price range you are working with when looking for a property. This is highly recommended especially if you are a first time buyer in the Spanish housing market. You can also ask the same advice from the estate agents.
There are no tax advantages to purchasing a house and capital gains is only payable on the profit that you make when you sell the property and this can be avoided if you are officially resident in Spain and planning on reinvesting the money into another Spanish property.
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