I often get asked what the procedure is for securing a Mortgage in Spain if you are non-resident. First of all, the process is relatively stress free and would be handled step by step by our legal team as part of their overall service.
For a Spanish mortgage, you will generally need a minimum deposit of 30% of the property’s purchase price, with borrowing rates currently starting around 2% (lower for premium clients). The maximum mortgage for non-residents is 70% of the purchase price or valuation, usually depending on which is lower, again this is best case scenario and the more likely percentage would be approximately 60% depending on individuals criteria.
Costs paid by the buyer include: Property transfer tax 6–10% (existing properties) / VAT (or IVA) at 10% (new properties); Notary costs, title deed tax and land registration fee 1–2.5%; Legal fees 1–2% (including VAT). So in total, remember to budget up to an additional 10/ 12 % on top of purchase price within the total cost of purchase. If you do require a mortgage however, I would suggest that you budget 13/14%. Our legal team charge 1% which is very competitive in todays market with most other quotes likely to be at least 1.5%. Once you have paid your deposit to take the property off the market the team will begin the due diligence to ensure all applicable licences are in place to proceed to the next step of your purchase.
A few pointers:
- Finance up to 70 per cent of the house purchase value
- Fixed Rate Mortgage or Variable Rate Mortgages are available
- Long-term mortgage, of up to 25 years
- Maximum age at end of the loan of 75 years
- Total loan repayments should not exceed 35 per cent of your net monthly income
- Home insurance is mandatory by Spanish law
- Do you know how much you can borrow? Our team can advise you on this.
- With the bank’s approval you will agree a deposit to purchase your home and remove from the market
- Apply for your NIE number in the police station (a required Spanish identification number) again, our team will handle this.
- Sign all the pre-contractual documentations requested by the Banco de España (Bank of Spain) confirming you understand and agree to all the conditions
- Sign the mortgage deeds at the notary along with the house purchase deed
- Move in and Enjoy your new holiday or permanent home!