Financial guide to buying a property in Spain

Our financial Guide to buying a property in Spain helps you to take a first step to learn more about financing your Spanish property.

Interest rates in Spain are slowly rising, but they’re still significantly lower than in for example the UK and other parts of the world.

In the past the Spanish mortgage market only had few options to finance your property. The only mortgage was a repayment mortgage over a certain (small) number of years. Nowadays this has totally changed. The mortgages are more flexible and there is a solutions for the need of almost everybody.

We, through the years, build up solid relation ships with different major banks and their bank managers allowing us to provide excellent rates for our clients.

A free, no-obligation consultation with one of the bank managers gives you the chance to see:

» The different options you have to finance your new home.

» Establish exactly how much you can borrow.

» What the monthly repayments will be.

» The price range of properties within your budget.

» The deposit you’ll need.

We work closely together with major banks in Spain, such as the BBVA and the Banco de Andalucia. We can also help you should you wish to work with Banks in Gibraltar including major high street players such as Barclays, Royal Bank of Scotland and Halifax.

All Spanish mortgages are full status, and the bank manager can provide you with an agreement in principle in just 24 hours, followed by a letter of intent, which takes 4-6 weeks. Don’t forget to bring all the necessary documentation (you’ll find a list below).

What are the options?

» Equity release

If you are a foreign homeowner, with equity in your main residence, it may be possible to raise up to 120% of the funds required for your property purchase in Spain by utilising a combination of equity release and a maximum Spanish mortgage.

Re-mortgaging is a good way to take advantage of both the wide range of mortgage packages offering low interest rates, as well as ancillary financial products. We do like to point out that in case you don’t pay your mortgage in your home country your Spanish property is at risk.

» Assuming your foreign property has increased in value since you bought it, you may well be able to raise additional cash… and still reduce your monthly payments.

» If sufficient equity can be generated from your foreign property, you could raise a 20% deposit with your existing, with a Spanish mortgage covering the remaining 80%.

» And should you wish to buy a plot of land, the purchase could be financed with a variety of finance products, including equity release, with 100% of the building costs financed in stage payments.

Non-Spanish residents

» Depending on your age (most loans have to be repaid before reaching 75), you can expect a mortgage term of up to 30 years.

» Mortgages granted are normally up to a maximum of 70% of the valuation price, however, 80% is possible with guarantees. And if you are buying off plan, this is based on the property value on completion, not while it’s still being built.

» On rustic properties, mortgages of up to 60% are available.

» Mortgages are based on being able to spend a percentage of your net income between 35% and 40% on your mortgage payments.


Spanish residents

(This means you hold a Residencia card and are paying both national insurance [Seguridad Social] and tax in Spain.)

» Loans of up to 85% of property value (and with guarantees, 100%).

» Mortgages are based on a net income multiple of up to 50%.

» On rustic properties, mortgages of up to 60% are available.

» Equity release of up to 50% in the event of outright ownership of a Spanish property.


Documentation you will need to apply for your Spanish mortgage

In addition to your passport(s), you will also need to have the following documentation to hand:

» Proof of residence (e.g. driving licence, council tax receipt)

» Six months’ personal bank statements illustrating declared income and outgoings

» Three most recent wage slips, plus your latest P60

» If self-employed, audited accounts for the last two years

» Last two years’ tax returns and a letter from your accountant confirming your income and tax payments for the previous year

» Proof of any other sources of income that you may wish to borrow against

» Copy of any tenancy agreements on buy-to-let properties

» Details of any pension you may be receiving.

Please note:
As with everything to do with your money and property, you should always take independent advice before entering into any kind of agreement. The article(s) above are written based upon our understanding of the facts but do not constitute financial advice of any description.

Contact us and we will get you in contact with our contacts!

Useful Tools

Property Finder Service :
A new service designed to take the legwork out of finding your property within 30 minutes from Gibraltar. You simply tell us what kind of property you are looking for, and we will send you details of properties matching you search profile.
Property Search:
Browse our database for properties for sale and long term lets within 30 minutes from Gibraltar.

Useful Guides

Area Guide:
Information about the different areas within 30 minutes from Gibraltar. Comprehensive guides about the history, the culture and the property market for the different areas.
Buying Guide:
Step by step guide to buying a property in Spain. Having your needs clearly in your mind will make your property search easier and reduces the possibility that you buy a property that in the end doesn't suit you.
Financial Guide:
What do you need when financing your property in Spain. We will tell you which documents you need, which different options there are to financing your property and which connections we have to help you.

Legal Guide :
Useful information to consider before purchasing your property in Spain. Read the information and ask a questions to a lawyer from our panel of lawyers. A free consult? You’ll find the contact addresses here.





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Financial guide to buying a property in Spain - Financial guide to buying a property in Spain, en www.aj-andaluciaestates.com -