Mortgages for property in Spain

Mortgages for property in Spain

The first thing to remember is that mortgages for property in Spain are attached to the property and written into the escritura, or title deed. They tend to be expensive to set up with administration fees of up to €1,500 to €3,000 (£1,000- to £2,000) being the norm. On the other hand many properties in Spain, especially new properties in Spain already have a mortgage attached to them (this is a common way for a developer to finance construction of properties in Spain) and you can simply take this over, avoiding the need for set up fees. Spanish banks will usually lend non-residents between 60% and 80% of the declared value of the property, secured against the property in Spain or your property in your home country.

As in the UK, you’ll be required to provide proof of identity and proof of earnings, typically by supplying your last three salary slips, recent bank statements, a copy of your passport and sometimes a letter of reference from your employer. If you are self-employed, you’ll need to provide the last few years of your accounts, a report from your accountants, most recent tax return, recent personal bank statements and a copy of your passport.

You will also need to provide the bank with a copy of the offer letter or sales contract of the property in Spain (‘Contrato privado de compraventa’) and a Nota Simple from the property registry, which identifies what, if any, debts are attached to the property in Spain.

Mortgages in your country of residence

You may find it easier and initially cheaper to take out a mortgage with a bank in your current country of residence. Be aware, though, that exchange rate fluctuations can have a significant impact on your mortgage repayments as the value of the Euro rises and falls.