How to Get a Mortgage in Spain: A Guide to Buying Property

FAQs About Mortgages in Spain

LF: Why should I work with a mortgage broker in Spain?
KM: A mortgage broker streamlines the process of securing a mortgage in Spain, saving you time and helping you secure optimal terms. We collaborate with contacts across various banks, from branch managers to commercial directors, which significantly speeds up approval and helps obtain the best possible rates and borrowing amounts.

LF: Can I avoid broker fees by going directly to local banks?
KM: By working with us, you’ll benefit from lower rates and better loan conditions than if you approached banks yourself. Spanish banks offer us preferential terms because they value our business and trust our clients’ low default rates, so they're more likely to approve applications.

LF: What is the maximum amount I can borrow?
KM: If you’re not a Spanish resident or taxpayer, you can typically borrow up to 70% of the property’s value. For those living and paying taxes in Spain, the maximum loan amount can be up to 80%.

LF: How do banks assess what I can afford?
KM: Spanish banks use around one-third of your net monthly income to determine affordability. This amount must cover your existing debts, any rent, and the new Spanish mortgage.

LF: What interest rate options are available?
KM: Your interest rate will depend on your financial profile. You can choose a fixed rate for up to 25 years, or a variable rate based on the annual Euribor.

LF: Will my lender be a Spanish bank?
KM: Usually, but not always. We recommend banks with the most favorable mortgage terms, which may occasionally include international lenders.

LF: What documents do I need to apply for a mortgage in Spain?
KM: For an initial quote, we need to understand your financial profile, which might not require documents right away. However, to formally apply, you’ll need to provide identity documents, proof of income, tax history, assets, debts, and a credit report.

LF: What additional costs should I expect when buying a property in Spain?
KM: Taxes vary by region and affect the overall cost. For example, property tax (stamp duty) is 10% in Catalonia and Valencia but only 6% in Madrid. Typically, excluding Madrid, buyers should plan for about 12% to 15% of the property price in additional costs. For Madrid, around 10% is standard.

LF: How long does it take to secure a mortgage?
KM: Allow six to eight weeks from start to finish. While some mortgages complete within four weeks, this is less common.

LF: Are interest-only mortgages available?
KM: No, not typically. Spanish mortgaeges require capital and interest payments from day one, so the full capital is paid off by the end of the term. For construction mortgages, interest-only may be possible for a short initial period.

LF: Is life insurance necessary with a mortgage in Spain?
KM: No, it’s not required. While some banks still require life insurance, others no longer do.

LF: Do I need an NIE number and a lawyer when buying property in Spain?
KM: Yes, all property buyers in Spain need an NIE number (Spanish identification number). We strongly recommend hiring a lawyer to help with the buying process, and they can also apply for the NIE number on your behalf.

Buying a Property in Spain with a Mortgage

Securing a mortgage in Spain can be a straightforward process when you have the right guidance and support. Whether you're considering a second home or planning to relocate, Mortgage Direct’s expertise and Lucas Fox’s industry connections can help make buying a property in Spain an easier, more enjoyable experience.

If you have any questions or need assistance with your property purchase in Spain, feel free to contact us. Our team is here to guide you every step of the way and provide personalized advice and support.

For more insights on competitive mortgage rates, eligibility criteria, and available options for non-residents, we encourage you to explore our comprehensive article on Spanish Mortgage Rates for Non-Residents: Secure Low Rates Today.