Frequently asked questions about Spanish mortgages

What are the main types of mortgage in Spain?

The vast majority of mortgages in Spain are repayment (capital + interest), there are rare exceptions where interest only is granted, however only for a short period.  There are several types of interest rate available; fixed, mixed rate (a period of fixed rate followed by variable) and variable.  With a variable-rate mortgage, repayments vary according to the Euribor, the base rate set by the European Central Bank.

What is the typical length of a Spanish mortgage?

Banks may offer residents and non-residents a term from 5 to 30 years, depending on the lender and how old you are (some banks will lend up to the age of 80).

How much can I borrow?

The lenders will decide this after reviewing your personal and financial profile. In general Spanish mortgage lenders give 60%-70% of the purchase price of the property to non-residents.  Residents may be able to borrow up to 90%.  If a property in Spain is already owned some banks may increase their lending by taking security over both this property and the new one.


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Are there additional costs when purchasing in Spain?

Yes, there are taxes, deed costs, lawyer and bank fees to consider when purchasing a property.  You should allow typically around 10% to 14% of the purchase price on top to cover these costs.

Is there a penalty for early repayment?

If you decide to pay all or part of your mortgage off before the end of the term there will be penalties.  From June 2019 Spanish law dictates that the maximum you could possibly pay will be 2%, but most likely it will be a lot less.  In some cases MMC can have the early redemption fee waived altogether!

Can I have a mortgage in my own domestic currency?

Yes, if you are non-EU citizen, as an example from Canada, you may choose to have your mortgage in Canadian Dollars.  All other fees and costs will be in Euros, the bank will set up a domestic currency account specifically for your mortgage so you can pay your mortgage in CAD.  Therefore there is no need to worry about currency fluctuations.

How much money will I have to put towards the purchase?

Typically we achieve 70% mortgages for our non-resident clients which means that the other 30% of the purchase price plus approximately 10% to 14% in taxes and fees must be covered by the clients own funds.  For example if you wish to purchase for €500.000 you will need approx. €210.000 of your own funds.


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What paperwork do I need?

Spanish banks need to see evidence of your income and savings plus the details of any existing mortgages or loans.  Usually bank statements, payslips and tax declarations (UK p60s if applicable) are normally required together with a credit report from your home country and evidence of savings you have to cover the cost of the rest of the purchase.


If you are a business owner and receive dividends or profits from your company then the bank will ask to see your balance sheet and profit and loss accounts for the last 3 years.


You MUST also have a valid passport and a Spanish NIE number registered with Hacienda (the Spanish Tax Office) in order to purchase a property in Spain – MMC or your lawyer can arrange to obtain your NIE number.


How to obtain an NIE number

Can I release equity?

If you own a property already in Spain it is possible to release up to 80% of the equity in your home.

Can I change my mortgage later on?

Yes, new Spanish mortgage laws introduced in June 2019 allow the mortgagee to switch their mortgage product.  If you wish to change banks or simply look for a better deal then contact us at MMC for advice.

Can I borrow money to buy a plot?

Initially you must buy the plot for cash as mortgages can only be granted against a property.  If you have a building licence and project then you could borrow up to 50% of the plot price plus up to 70% of the build cost.

Can I borrow money to purchase a commercial property?

Yes, typically the banks will lend up to 50% of the purchase price for a commercial property.

Do I have to have the banks own insurances?

It is a condition with all Spanish mortgages that you insure your property, the banks own insurance is usually competitive and could reduce your interest rate.  

Do I need a valuation?

Yes, if you want the bank to give you a mortgage then you must have the property valued by a recognised valuation company, MMC can arrange this for you.  Bear in mind that the bank will base the mortgage on whichever is the lowest value, the purchase price or the valuation.

Do I need to open a bank account?

In most cases you will have a bank account with your mortgage provider, MMC will take care of this for you.

Can I have a mortgage after I have purchased?

If you had to buy in a hurry and didn't have time to arrange a mortgage beforehand, then you could apply retrospectively.  However, typically you must make the application within a month of the purchase.


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What happens if my purchase falls through?

If we have secured a mortgage for you but the purchase falls through, for example if the seller changed their mind or possibly there was a legal issue which could not be resolved, we will hold your mortgage application open with no fee to pay until you find another property to buy.  We may ask you for some top up paperwork but refreshing a mortgage application is quite straightforward.

More Questions?
If you still have further questions or would like to find out how we can assist you with your mortgage application, please contact us today