Rayos de sol
Rayos de sol
Rayos de sol

A mortgage in Spain - what are the things you need to know?

Jul 04, 2018

Do you want to buy a home in Spain and need a mortgage to do it? If so, you can get a mortgage in Spain. It is possible that there will be a few differences compared to your home country, however. What are the things you need to know?

No complicated mortgage products

Spain does not have any complicated mortgage constructions with investment products, such as those that you come across in many other European countries. The most common mortgage is a simply a “constant payment” mortgage. For this type of mortgage, you pay the same amount each month. This amount consists of both the interest and the repayment amount.

Maximum mortgage amount in Spain

In general, you can borrow up to 70% of the sales prices or the appraisal value. The lower of the two is the one that applies. If this is your first home in Spain and you are a resident, you can typically borrow 80%. In that case, you have to pay for all the additional fees involved in the purchase on your own. In Spain, these can quickly turn into 14% if you need a mortgage. For example, if you purchase a home worth 300,000 euros to spend holidays at, then you can receive up to 210,000 euros. In this case, you pay the mortgage and purchasing costs of 14% yourself, which would be 42,000 euros. Therefore, in order to buy a house worth 300,000 euros, you need to have at least 132,000 euros. However, there is an exception. If you purchase a home that was seized by the bank and receive your mortgage from the same bank, the purchase price will sometimes be financed for up to 100%.

Maximum duration

The maximum duration of a mortgage in Spain is 30 years. However, this depends on your age at the time you purchase the house. If you are 50 years old when you purchase the home, then the maximum duration will likely be closer to 25 years. At most Spanish banks, the general rule is that your mortgage should be paid off by 75 years of age.

Requirements for a mortgage in Spain

The bank looks into a number of matters in order to assess whether you will be eligible for a mortgage in Spain. The primary concerns are your income, age, and the (appraisal) value of the home. Furthermore, the composition of your family may play a role as well as whether you are a resident or if you plan to use the house in Spain as your home or as a holiday getaway.

In Spain, up to 35% of your net monthly income can be used for the total of the mortgage taxes in Spain, gross mortgage taxes in your own country, alimony obligations and loans. You can assume that you need to earn roughly three times as much as your monthly mortgage payment. For a mortgage of 500 euros per month, you would need to earn at least 1,500 euros per month without there being any other requirements (such as a mortgage in your home country, payments for other loans and alimony).

Mortgage specialist in Spain

It is important that you seek out good consulting services for a mortgage in Spain. For this reason, please visit www.mortgageinspainsl.com. More information on mortgages in Spain is available there and you can directly request a mortgage quotation (in English).

More information

Would you like to know more about a mortgage in Spain? Rayos de Sol specialises in the purchase and sale of residences along the Costa Blanca and Costa Calida. We would be happy to answer your questions, so please call us on 0031 657 157 235 (international) or 0034 634 311 047 (in Spain). You can also send us an email to info@rayosdesol.com.

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