How to Get Mortgage in Spain

If you would like to buy property in Spain, you can get a mortgage whether you are a citizen or not. Non-citizens take slightly over 6.5% of all mortgages each year. The rates for non-citizens are a little higher than those of the citizens and, in most cases, only get loans up to 60% of the property values. Citizens can get up to 80% of the property’s value, a whopping 20 percent difference. Many local and international banks accept mortgage requests from non-citizens, but each has a different application procedure.

Nevertheless, Spain is one of the best countries to take a mortgage. Here are the reasons why.

There is a Golden Visa for Large Investors

If you are a non-citizen and have at least €500,000 to spend on real estate, you can receive the golden visa. The visa allows you to reside in Spain and travel across the EU. However, it does not allow you to work or enjoy state benefits.

There are No Setup Costs

In June 2019, the Spanish law changed to lay the burden of paying setup costs on banks. Banks assume such costs as notary fees, stamp duty and registration fees. However, you may have to pay a valuation fee, which is fixed at between €300 and €500. There is also an arrangement fee, which is usually 1% to 1.5% of the total loan amount.

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Low-Interest Rates

Spanish mortgages have some of the lowest interest rates in Europe. However, due to the low rates and few costs, banks are quite meticulous when accepting mortgage requests and, in most cases, finance less than 70% of the property value.

You Can Pay with Your Home Currency

If you are in a non-EU country, you can pay your loan in the currency of your home country. There are various currency options available to non-citizens. It saves you from fluctuations in exchange rates. Check the available options when signing your loan.

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Steps when Applying for a Mortgage

Here are steps to take when applying for a mortgage in Spain as a foreigner.

Submit Documents

You will need to submit documents that show your identity, income and debts. Banks will also want to ascertain the amount of tax you pay each year. These documents include bank statements and tax returns.

Get a Pre-offer

After the bank analyses your documents, it will make the first offer. You can negotiate for better rates or get counteroffers from other banks. Always carry the initial offer when looking for offers in other banks. It helps in bargaining.

Open a Bank Account in Spain

After getting an offer, you need to open an account in Spain. You will be wiring your repayments via this account each month.

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Accept and Agree with the Offer

Look at the amounts and terms of different offers and choose the best. Remember that a mortgage is a long-term loan. Therefore, take your time when choosing one so that you can get the best terms.

Final Steps

Once you have accepted the offer, you need to sign the necessary papers to receive your cash. The documents must also be notarized. You can also give a lawyer a power of attorney to act on your behalf if you are not in Spain. The lender will require you to get insurance cover against disasters such as fires once you have paid for the property.