Mortgages in Spain

Mortgages in Spain: what expats need to know when taking out a Spanish mortgage


If you are serious about buying a property in Spain, then as well as carefully searching for the right property, it is also highly important to do your research when it comes to getting a mortgage in Spain if you plan to ask for financing. Planning ahead and doing your research will allow you to find the mortgage in Spain that best suits your needs and also help you avoid overpaying. Let’s have a look at 5 things that foreigners need to know when taking out a mortgage in Spain.

    Non-residents vs. residents
    Types of mortgages in Spain
    What documents are needed to apply for a mortgage in Spain?
    Additional fees on Spanish mortgages
    How long does it take to get a mortgage in Spain?

Non-residents vs. residents

The first thing you need to establish if you are planning to buy property in Spain is whether you are going to do so as a resident or as a non-resident. This makes a big difference, and while it is possible to get a mortgage in Spain as a non-resident, the process is more difficult. While some Spanish banks do not lend money to people living abroad, whether Spaniards or expats who are not registered as residents, many others will, but with added conditions. For this reason, it is important to know the ins and outs when taking out a mortgage in Spain as a non-resident to avoid unpleasant surprises.

Some conditions that are applied to non-resident mortgages include the following:

    You will have to provide a credit rating, as well as an employment contract, job record, salary history and details for your most recent tax return.
    Banks will not lend as much money to non-residents: while residents in Spain generally get financing between 80 and 100% in some cases, this figure for non-residents tends to be around only 60%.
    The maximum term will be no more than 20 years: this figure can reach up to 40 years for residents in Spain.
    As a non-resident, you will probably only have the option of a fixed rate mortgage as this is a lower risk option for banks (although this is not always the case).
    Higher interest rates for non-residents.
    All your documentation must be officially translated to Spanish.
    If you sell the property as a non-resident, a 3% tax will be applied.

For more information and guidance about mortgages for non-residents, check out idealista/hipotecas and get in touch with our mortgage experts.
Types of mortgages in Spain

In Spain there are 3 main types of mortgages: variable (adjusted with the Euribor), fixed, and mixed (a combination of both). Even though the financial products in themselves are the same for both residents and non-residents, it is worth noting that these mortgages may be subject to the conditions mentioned above and some differences may arise. Starting from here, you will then be able to find out how much interest you will have to pay, something which will depend on your profile as a buyer (i.e. how solvent you look in the eyes of the bank).
What documents are needed to apply for a mortgage in Spain?

The documents you need to submit when applying for a mortgage in Spain are both to show your identity and prove your income, assets, and debts. You will need:

    a copy of your passport
    a NIE number: this is the basic identification number you will need to carry out any legal procedure in Spain, including buying property. Find out how to get a NIE in Spain.
    proof of employment or income.
    your latest income tax return.
    a purchasing agreement from the seller.
    proof that demonstrates that all the property taxes are paid to date.
    complete information about other loans you may currently have.
    proof of your current assets and debts.
    a copy of your existing property deeds (in Spain or in any other country)

Additional fees on Spanish mortgages

When buying property and taking out a mortgage in Spain, it’s important to be aware of everything that you will have to pay from the word go. While banks in Spain generally don’t charge you either to get a mortgage offer or to take out a mortgage, there are other fees that need to be considered such as the property valuation, or perhaps even the help of a mortgage advisor or translator if you’re not familiar with how the system works or don’t speak much Spanish. Check out our guide which details all the costs and taxes associated with buying a home in Spain in 2020.
How long does it take to get a mortgage in Spain?

When applying for a mortgage for a property in Spain, the best advice is to start early and shop around. While the official mortgage process can only start after a sales agreement on your new home has been reached, it is both possible and advisable to start looking for a mortgage and contacting banks before this. The process from start to finish usually takes 6-8 weeks.