Mortgage Spain

Mortgage Spain

Property in Spain is mostly remarkably cheap, especially when compared to many other parts of Europe. Glynna Prentice of International Living recommends Valencia, Spain’s third-largest city, as one of the cheapest and most attractive places to get a mortgage in Spain. Best of all, Spain’s government runs a residential program where if you buy a property worth at least 1690,000 Euros you earn a residency permit. Read on further to find out more on Mortgage Spain.

Mortgage in Spain: How much can you expect to get?

Most lenders offer non-residents up to 70% of purchasing price, while residents can land up to 80-100% of property value. In some cases, property is valued at a loan to value ratio (LTV), i.e. at the bank assessor’s valuation of the property rather than the purchase price, although this depends on your Spanish mortgage product. You’ll want to check with your lending institution regarding their specific policies.

Mortgage in Spain: Documents needed

Both banks and cajas (i.e. saving banks) offer mortgages. You’ll find the same range of choices as in Britain, with the fixed, variable and mixed option. Most people tend to prefer the fixed package that comes with higher initial interest rate, but tends to be cheaper in the long run since it avoids interest fluctuations.

Since lenders want your liabilities to be less than 35% of your net monthly income, they’ll closely check existing and future liabilities to determine your ability to repay. Both residents and non-residents will be expected to prove that they can pay the costs with documents that include wage slips from the last three months and bank statements of the last six months. If you are self-employed, you’ll need to show copies of last year’s business bank statements as well as previous six months personal statements.

Requirements for non-residents

Non-residents who seek a mortgage Spain also have to produce the following:

  • An aval, namely a guarantor who lives in Spain and agrees to pay if you’re unable to.
  • A NIE (Número de Identificación para Extranjeros) – which is the equivalent of a social security number and which everyone in Spain needs for buying or selling peroprety.You get your NIE from the local police station. Outside Spain, go to your local Spanish consulate.

Bottom Line

You’ll find getting a mortgage in Spain to be an exciting process, particularly since Spain encourages foreign investors with it’s so called “golden visa” or visa-and-property scheme, where you can get a residency under certain conditions, and where Spanish banks produce an array of mortgage products specifically designed for foreign and expat investors. Interest rates, too, are cheaper than in many parts of Europe.

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