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If you plan to buy a spanish
property we have listed
for you the most
common questions
that we get on spanish mortgage Here are some of the most common questions asked about mortgages in Spain. If you have any specific question please feel free to use our Online Question Form
1. I want to buy a holiday residence in Spain - can I get a mortgage?
Yes you can. If you can prove your income, the amount that you can borrow is determined by the survey of the property (maximum 80% of valuation) and your income. Please use our Mortgage calculator to see how much you can borrow. If you can’t prove your income the amount you can borrow is limited to 120.000 euros or 50% of valuation
2. I want to buy a house for 200,000 euros and need a mortgage for 150,000 euros to be able to complete the purchase. Since I’m 55 years old I would need to apply for a loan for 15 years. What would the monthly repayments be?
Please use our Mortgage calculator to easily find out the monthly repayments.
3. What are the purchase and mortgage costs?
The purchase costs are about 10% of the purchase price and the costs for the mortgage are about 2,5% of the loan amount.
4. Can I borrow against the legal costs as well?
No, you can only lend against the purchase price without the legal costs.
5. Do I have to have a life assurance when raising a mortgage?
No, this is not obligatory in Spain but some banks offer better terms and conditions if you also sign a life insurance policy.
mySpanishMortgage can also provide you with a life assurance if you wish.
6. I’m 60 years old and I’ve heard that the mortgage must be repaid by the age of 70. If I were to take out a mortgage for 10 years the repayments would be way too high. What should I do?
The banks usually require that the mortgage be paid off when the applicant is 70 years old. Older applicants can avoid this by including their children on the mortgage deed either as applicants or guarantors. The loan amount can be to a maximum of 80% of the value of the property.
7. What if I want to make an early cancellation of the mortgage? Will the bank charge me any penalty fees?
Spanish banks usually charge 0,5-1% for early cancellation if it’s partial and 1% if you want to cancel the total mortgage amount.
8. I just changed employment, does this make it difficult for me to get a mortgage?
No, not necessarily. The type of profession that you have is more important that the history that you have with one particular employer.
9. I’m purchasing an off-plan property in Malaga , which is still in the early stages of construction and is due to be completed within one year. How far in advance can I apply for a mortgage?
You can use our mortgage calculator to see how much you can borrow but you can’t get a binding mortgage decision from a bank until about 3 months before the completion. This is because your income proof shouldn’t be more than 3-6 months old at the date of signing the mortgage.
10. How long does it take to arrange the mortgage?
The whole process usually takes about 1 month. The approval subject to valuation takes 2-3 days, it takes about 1 week to get the results of the survey of the property and the mortgage can be signed about 2 weeks after that.
Costs related to a house purchase
There are some costs related to a property purchase in Spain and the mortgage to finance it. In order to help buyers to estimate the total budget we have made a list of the most frequent costs. This list should only be used as a guideline, it is not a complete list, other costs may arise depending on the circumstances of the purchase.
Professional property surveyor
Prior to signing the mortgage the property has to be examined by a professional property surveyor. The costs for the survey are approximately 100 euros for each 100,000 worth of property. The minimum cost for a survey is about 300 euros.
Bank and insurance
All Spanish banks put as a condition that you contract various other products in order to get the mortgage. These products are usually a current account and building and contents insurance. Most banks also provide you (directly or by an insurance company) with life assurance policies. The total cost for the current account is about 50 euros/year and the cost for the building and contents insurance depend on the value of the property. A good rule iof thumb is to calculate 100 euros for each 100,000 worth of property. The insurance cost for a property valued at 400,000 would therefore be about 400 euros. The cost of a life assurance policy depends on many factors such as age, gender, health and the sum assured.
Legal costs
Most banks work with what is called “gestorías”, administrative offices that make sure that all the buyers and sellers taxes are paid correctly into the tax office. The banks usually demand that these matters are managed by the gestoría of their choice so that they can make sure that the property gets registered correctly. This gives the bank the comfort of knowing that the security for the loan has been registered correctly in the Spanish property registry. It also gives YOU the security that previous debts and claims on the property have been cancelled correctly and that the property will be registered correctly in your name. The size of these fees and taxes depends on the declared price of the property and whether it is new or used. It also depends on the agreement between the buyer and seller regarding who pays what. The normal case is that the buyer pays for the notary fees, the title deed and the taxes and the seller pays the “plusvalía”. The IVA tax (new properties) is 7% of the declared value and the ITP (“Impuesto de transmisiones patrimoniales”) transfer tax is 6-7% of the declared value. The stamp duty of the mortgage is normally 1,6-1,8% of the mortgage. As a rule of thumb the sum of all legal costs is about 10% of the declared price of the property. A specification of these costs will be made by the gestoría and the corresponding amount will be retained from the mortgage amount. mySpanishMortgage.com will of course provide you with the specification as soon as we get it from the gestoría.
Solicitor
The banks do legal surveys on the property but are focused mainly on the utility of the property as a security for the loan. There are some important aspects not considered by the bank. These matters can be taken care of by a solicitor who makes a comprehensive examination, verifying that there are no adverse circumstances which reduce the value of the property. He can also help you in setting up the private purchase contract. The solicitor also arranges the signing at the notary office and helps you to get the N.I.E. numbers (Identification numbers for foreigners) necessary to complete a property purchase in Spain . Therefore we advise all our customers to use a solicitor when purchasing a property in Spain . The cost for the solicitor’s services is approximately 1% of the price of the property. As we collaborate with various local solicitors we would be more than happy to assist you finding a competent solicitor to help you with all the legal aspects of the property purchase. If you need a solicitor’s assistance please provide us with this information in the application form.
Our fees
We will not charge any brokerage fee if you choose not to accept the mortgage offer through mySpanishMortgage.com. If you do choose to accept the mortgage offer provided by us you will be charged a brokerage fee of 800 euros.
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