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Mortgages in Spain

Many guides about buying property in Spain assume that potential buyers actually have the money available, but if you are considering buying a house in Spain because you live and work here, or because you simply want to invest in real estate in Spain, you may want to consider taking out a mortgage with a Spanish Bank. Whether you want to buy a finca in Spain, a holiday apartment or a new home in Spain, taking out a Spanish mortgage may be the right solution for you.

Interest rates in Spain vary, but are generally now, higher than in the UK, and Spanish banks are not lending sufficiently and we see interest rates charged at above 6%, plus additional charges for set up costs, etc. You would be wise to shop around for the best deal.

You will be expected to prove ability to pay (i.e. wage slips from the last 3 months and bank statements of the last 6 months or, if you are self-employed, copies of your last 3 years accounts (with an auditor's stamp) and copies of you last 12 month's business bank statements and your last 6 months personal bank statements). Proof of payment based on your ability to pay with income received from renting the property will not be taken into account by Spanish banks. See our full listdocuments necessary to apply for a mortgage with a Spanish bank for residents and non-residents.

Non-resident buyers

  • A copy of your passport
  • Marital status, age, children etc. (married couples applying for a mortgage should provide information about both spouses)
  • Your last three salary pay statements or pension vouchers
  • The last tax declaration made in your home country (P-60)
  • If you are an employer or are self-employed, a copy of your tax returns and annual accounts for the last two fiscal years
  • Information about other properties owned fully or partly
  • Details of the property you are planning to buy
  • A brief description of current job situation, other incomes, investments, debts and other properties whether abroad or in Spain, etc.
  • Information about any other sources of income

Buyers with Spanish residence permit

  • Copy of the residence permit
  • Marital status, age, children etc. (married couples applying for a mortgage should provide information about both spouses)
  • Your last three salary pay statements or pension vouchers
  • Details of the property you are going to buy ("Nota Simple")
  • Copy of your last tax declaration
  • Photocopy of the last IBI bill
  • Information about any other owned property
  • Information about any other debts
  • Information about any other sources of income
    Annual accounts for the last two fiscal years (if employer or self-employed)

If you are not a legal resident in this country, then you may be asked to provide an aval. This will be somebody usually based in Spain who agrees to pay in the event of you being unable to. You will also be required to have a NIE (Número de Identificación para Extranjeros) which is like an ID number everyone needs (residents and non-residents) in order to buy or sell property in Spain.

Most Spanish banks currently offer mortgages of 60-70% property price over 5, 10, 15 or 20 years depending on whether you are a resident here or not. The current variable rate is about 6% and there is usually an early write-off fee of around 1.5%.

Liabilities should not exceed 35% of your net monthly income. Banks use the following variables to determine your ability to pay off the mortgage:

  • Existing liabilities (existing loans or mortgages, monthly maintenance agreements...)
  • Future liabilities including the proposed loan
  • Present income and investments.
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