Getting a mortgage to buy property in Spain

Mortgage Advice

Spanish beach

You can raise the mortgage in your home country or in Spain. If you live outside the euro zone it is probably best to borrow in Spain so that your repayments are not affected by exchange rate fluctuations. The major difference between Spanish mortgages and those in Britain or Ireland is that changing the terms of the mortgage, for example early redemption or equity release, tends not to be as straightforward.

This means you should be very careful about the product you pick as you may not find it easy to switch to another mortgage if you are unhappy with the one you have.

What documents will I need?

The following documents are normally required for the different types of mortgage applications.

For employed applicants

  • Copy(ies) of your passport(s)
  • Last 3 months pay slips
  • Last P60
  • Letter from employer confirming annual salary and length of service
  • Bank reference letter
  • 3 months bank statements
  • Breakdown of your assets and liabilities and monthly commitment to borrowings
  • NIE number (obtainable in Spain and not needed until nearer loan issue)

For self employed applicants

  • Copy(ies) of your passport(s)
  • Previous years tax return
  • Last 3 years accounts (sometimes last two or even last one acceptable)
  • Letter from accountant confirming your profit figure and that taxes are paid up to date
  • Last 3 months bank statements (not always required)
  • Bank reference letter
  • Breakdown of your assets and liabilities and the monthly commitment to borrowings
  • NIE number (obtainable in Spain and not needed until nearer loan issue)

Commercial Mortgages

If you are looking for a mortgage to buy a business, you will need to supply the following:

  • An explanation of your previous employment(s) and relevant experience of the enterprise you expect to undertake in Spain
  • Details of the tangible asset (always required and usually a local or workshop) to be available as security
  • Breakdown of your assets and liabilities and your monthly commitment to borrowings
  • NIE number (obtainable in Spain and not needed until nearer drawdown)

The maximum loan available varies. It is normally 50% of the purchase price, but in some cases you can get up to 70% if an easily saleable asset is provided as security.

Bear in mind that the requirements outlined are a general guideline.

Buying property in Spain - First Steps - Choose your area

Decide on the type of property you want and see what is available

Calculate your budget and arrange finance

Arrange an inspection visit to see available Spanish properties

Making an offer on a property

Exchanging currency

Arranging a mortgage on your Spanish property

Legal matters

Deposit and completion

Tax considerations when buying Spanish property

Approximate costs when buying property in Spain

Insurance