Mortgage in Spain – a property buyer’s guide

Questions and Answers

You have the Questions and we have the Answers! Let Start Group help you!

At StartGroup, we are dedicated to customer care and service by giving the best advice for your Spanish finance solutions. We are working together with several major Spanish banks and through them we offer all available mortgage products. We offer a free study of your situation in order to find the best solution for you, even before finding the right property. That way you will know all your possibilities beforehand and can base your property search on that.

Do you need to finance most of the purchase amount?

Our bank repossessions may be of interest. On this page we have outlined a small Mortgage Guide, but please do not hesitate to contact us for personalised advise.

Spanish Banks Are Stronger and Healthier Now

The Spanish banks have gone though major structural changes since 2010 when the Spanish national bank made the laws stricter. Several of the local savings banks have been forced into fusions or been bought up by the bigger banks. This way the Spanish banks are now stronger and healthier. Thanks to this the insecurity from the bank crisis of 2009 is now over, the banks now want to lend money again and the terms have been stabilized.

How Much Can I Borrow?

In Spain a EU-citizen can normally borrow up to 70%, sometimes 80%, of the purchase price of the property, which is set as security. The term is normally up to 30 years even though there can be limitations due to the age of the loan taker, as the banks want the mortgage to be paid off by the age of 75. That means that a loan taker of 60 years of age can get a loan term of 15 years.

Russian and other non-EU citizens can normally get a loan of up to 60% of the purchase price.

If you need a higher LTV (Loan To Value), maybe our bank repossessions would be of interest, the bank selling normally offer special conditions and rates, even up to 100% of the purchase price.

What Are The Interest Rates?

The interest rates are normally bound on 1 year to the EURIBOR rate, but fixed interest rates on 3, 5, 10, 20 and now even 30 years are also available. The rates offered ranges from Euribor +1% – +3%, so if the Euribor is, for example 0,1%, and the banks add on 2% you would be paying 2,1%. Some banks offer a fixed rate for the first few years followed by a variable rate.

Interest only terms are not so common in Spain. Before the bank crisis in 2009 it was more common and now in 2016 we have seen the interest only options coming back gradually. At the moment the bank will study each individual request for interest only periods.

You can see the Euribor rate on the web page of the European Central Bank under this link:http://www.euribor-rates.eu/ecb-refinancing-rate.asp

Bear in mind that the various banks have different product available and some might suit you while other do not. In order to see your particular case it is always best to have a private consultation with your property expert at Start Group who can guide you to the best mortgage for you.

What Costs Are Involved To Obtain A Mortgage In Spain?

The cost for the notary and the land registry varies with the amount of the mortgage but is normally a few hundred euros.

  • In Spain the mortgage has a separate deed which is signed in front of a notary.
  • It then requires registration in the land registry. This is normally done using a “Gestoria” appointed by the bank and is paid by the person requiring the loan.
  • Bank opening fee that ranges from 0-2%, but is normally 1%
  • The valuation which is ordered by the bank but carried out by an independent valuer, can cost around 300 Euros for a cheaper property and over a thousand euros for a very big property. For most properties the bank valuation cost between 300 to 600 Euros.
  • So the total cost, amounts to around 1,5-2% of the mortgage amount.

To give you an idea, for a mortgage of 200 000 Euros (in Andalusia) the cost involved are approximately:

  • Notary fee 600 Euros
  • Land registry 400 Euros
  • Gestoria 300 Euros
  • Bank valuation 300 Euros
  • The bank’s opening fee, ranges between 0-2% depending on the type of mortgage chosen

Please contact us and we will look at your individual case and quote the best options for you.

What Documents Do I Have To Provide To Get A Mortgage Offer?

Documentation necessary to obtain mortgage offer:

If employed:

  • Latest tax return (P60 for the UK, Notice of assessment for Ireland, Skattedeklaration for Sweden, Ligning for Norway)
  • 3 latest payslips (lönespecifikation)
  • Last 3 months bank statements showing salary
  • Passport copy
  • Experian credit report or similar (available in your country)

Self-employed person or company:

  • Latest tax return (P60 for the UK, Notice of assessment for Ireland, Skattedeklaration for Sweden, Ligning for Norway)
  • Last 6 months bank statements
  • Internal accounts signed by accountant
  • Letter from chartered accountant stating; nature of business, confirming last years turnover and earnings, forecast for the present year
  • Passport copy and the deed of registration of the company if applicable

All information is correct at the publication in November 2018. The cost and available financial product may vary without prior notification and any finance in Spain are always subject to status and case study as well as due diligence.