I’m frequently asked how to obtain a mortgage in Spain if you are not a resident. To begin with, the procedure is comparatively stress-free and will be managed step by step by our legal team as part of their total service.
With borrowing rates currently starting at around 2 percent, you will typically require a minimum deposit of 30 percent of the property’s purchase price for a Spanish mortgage (lower for premium clients). The maximum mortgage for non-residents is 70% of the valuation or purchase price, whichever is smaller. This is the best-case scenario; the more likely percentage would be about 60% depending on the borrower’s criteria.
Property transfer taxes range from 6 to 10 percent (for existing properties) and from 10 percent (for new properties); notary fees, title deed tax, and land registration fees range from 1 to 2.5 percent; and legal fees range from 1 to 2 percent (including VAT). Therefore, keep in mind to budget up to an additional 10% to 12% on top of the buying price as part of the overall cost of the transaction. However, if you do need a mortgage, I would advise you to set aside 13 to 14 percent of your income.
Our legal team charges 1%, which is highly competitive in today’s market considering that the majority of other bids are probably at least 1.5%. The team will start doing its due diligence to make sure all necessary licenses are in place before moving on to the next stage of your acquisition as soon as you pay the deposit to remove the property from the market.
A few suggestions:
- Finance up to 70% of the price of the home.
- There are fixed-rate mortgages and variable-rate mortgages.
- A mortgage with a period of up to 25 years.
- Maximum age of 75 years at loan’s expiration.
- Your total monthly loan payments should not be more than 35% of your net income.
- Spanish legislation requires homeowners to get insurance.
- Are you aware of your borrowing capacity? On this, our experts can give you advice.
- You will commit to a deposit to buy your property and remove it from the market after the bank approves it.
- Again, our team will handle applying for your NIE number at the police station (a necessary Spanish identity number).
- Sign all pre-contractual paperwork that the Banco de Espaa (Bank of Spain) requests to demonstrate your understanding and acceptance of all terms.
- Along with the house purchase document, sign the mortgage deeds before a notary.
- Enjoy your new holiday or permanent residence by moving in!