Mortgage In Spain

An entry into Spain's housing market.

When planning the purchase of a property in Spain, you may want to consider a mortgage from a Spanish bank. There are several advantages to this.

As of 2021, approximately 76% of the population in Spain owns their homes, surpassing the European Union’s average of 70%. The country welcomes international real estate investors, allowing non-residents to obtain a Spanish mortgage or purchase property. However, your residency status can influence certain aspects of the mortgage including the borrowing amount.

Considering the purchase of a property in Spain?

In 2022, CaixaBank reported that Spain’s housing market exhibits lower rates of overvaluation compared to other European countries. This implies lower risk for investors compared to countries like the Netherlands, Germany, or France. However, as of 2023, interest rates have been on the rise, causing stagnation in Spanish property prices. Additionally, it’s essential to note that housing prices can vary greatly across different areas. Properties in the center of Barcelona, for instance, will likely be valued at higher prices compared to property in Southern Spain.

Residency

Residency or Spanish citizenship is not required to purchase property in Spain. However, obtaining a Spanish mortgage requires having a “Número de Identificación de Extranjeros” (NIE), which is a tax identification number for foreigners. Mortgages in Spain have no restrictions on purchase price or borrower’s nationality.

Residents can typically borrow up to 80% of the property’s assessed value, while non-residents are subject to 50–70% LTV, varying by mortgage terms.

Getting a mortgage as a Foreigner

Borrowing capacity depends on factors such as income or existing debts.

Expats purchasing property in Spain may also face certain restrictions that are worth considering. Non-EU citizens and non-residents, including UK citizens post-Brexit, are typically limited to 90 days per 180-day period for visits to Spain and the wider Schengen travel area.

Types of mortgages in Spain

There are primarily two types of mortgages in Spain: “variable” and “fixed”. While some banks may offer diverse conditions, residents in Spain generally have access to loans with a maximum term of 40 years. In contrast, the mortgage duration for non-residents typically tends to be 15 to 20 years.

Mortgages with variable rates

Spanish mortgages with variable interest rates are determined by the Euro Interbank Offered Rate (Euribor). A potential drawback of using this option is the uncertainty regarding long-term monthly mortgage payments since interest rates can potentially rise.

Mortgages with a fixed rate

Opting for a fixed-rate mortgage in Spain carries less risk since this means you will have a clear understanding of your monthly repayments throughout the mortgage term. This mortgage type gained popularity among Spanish homebuyers in 2020 due to its security in uncertain periods.

Mortgages with a mixed interest rate

Also known as a hybrid mortgage, this mortgage type combines both fixed and variable rates. Typically, the fixed rate is applied for five years before automatically transitioning to a variable rate. However, this option is rarely offered by Spanish lenders.

Spanish mortgages for seniors

Spanish residents over 65 (receiving a pension) can apply for a Spanish mortgage to purchase a home. A common option for such expats is the Lifetime Loan, which enables senior residents to use their home property as equity in their Spanish mortgage.

Mortgages for Commercial property

Entrepreneurs in Spain seeking to buy commercial properties for offices, shops, or restaurants can also explore commercial loans. To initiate a commercial loan application, you would need provide the bank with documentation related to your income or business.

Deposit requirements

To secure a mortgage in Spain, a typical requirement is a minimum deposit of 30% of the property’s purchase price, with the lender financing the remaining 70%. This percentage may vary depending on individual circumstances.

Online mortgage calculator

Popular free mortgage calculators to estimate your monthly mortgage payment.

We can help you Apply for a mortgage in Spain

If you would like further information about applying for a mortgage in Spain, get in touch with us. We will help you in every step of the way.