Frequently Asked Questions
How much can I borrow and for how long?
What type of mortgages are there?
What is the interest rate?
How do I repay the mortgage?
What documents do I need?
How much is it going to cost me to buy my Spanish property?
How much can I borrow and for how long?
Lending in Spain is based on the valuation of the property. For urban properties 70% - 80% can be achieved although for ´rustic' property only 50% is available.
The maximum mortgage term is 30 years or a maximum age of 70 years. Some lenders will now lent up to 75 years of age, subject to status and satisfactory credit report.
top What type of mortgages are there?
Almost all mortgages are capital repayment meaning you will be paying off the interest as well at the capital in the same monthly payment. By borrowing 70% up to 10 years interest only is available although there must be a period of 10 years capital repayment. By borrowing 80% only 1 year interest only is available.
top What is the interest rate?
The interest rate in Spain is called EURIBOR (Euro Interbank Offered Rate). This is based on the European Central Bank base rate and changes every month. This means that your mortgage rate is fixed for one year and all mortgages are reviewed annually. 4.50% is a good indicator of the borrowing rate available to non residents. Generally the interest rate calculation for non residents is EURIBOR +1%. Be wary of special offers on the interest rate being discounted for the first year….you may end up paying EURIBOR +1.5% or even 2% in later years.
top How do I repay the mortgage?
Mortgages can be paid monthly, quarterly, half yearly or annually. Normally monthly is preferred although if you request different repayment periods we can arrange this for you.
We can refer you to a commercial exchange company who can arrange a fixed exchange rate for monthly repayments so the sterling you pay for your mortgage remains the same regardless of exchange rate fluctuation.
top What documents do I need?
| Employed |
Self Employed |
| Passport |
Passport |
| P60 |
Tax Return |
| Last 3 months pay slips |
Profit & Loss accounts for return |
| Last 3 months bank statements |
Balance sheet to date |
| Bank reference * |
Last 3 months personal & business bank statements |
| Employers reference * |
Bank reference * |
| Credit report * |
Credit report * |
| |
Accountants reference * |
* Required for 80% applications
top How much is it going to cost me to buy my Spanish property?
In general terms if you are purchasing without a mortgage you will need to pay 10% of the purchase price in taxes, charges and fees. If you are buying with a mortgage you will need to pay up to 13%. The fees are listed below:
Purchase costs
- 7% IVA (VAT)
- 1% Stamp duty
- 1% Legal fees (there may be a minimum to pay)
- Notary fees
Mortgage costs
- 1% - 1.5% Set-up fee
- 1% Stamp duty (1% of mortgage value + 1% of total accrued interest)
- Valuation fee
- Notary fee
- Arrangement fee
Your Spanish lawyer will be able to confirm the exact figures regarding the purchase and the lender will supply your lawyer with the relevant mortgage fees. Please note than mortgage funds are advanced net of tax and set up fees.
top |
