Spanish Mortgages Explained – Key Tips from Experts
If you’re thinking about buying property in Spain, understanding the mortgage process is crucial to your success. In a recent webinar hosted by My Lawyer in Spain, Alex was joined by Katherine from A Place in the Sun Mortgages/Founding Partner at Mortgage Direct, sharing her expertise from over 20 years in the Spanish market. Here’s what you need to know if you’re an international buyer looking to secure a Spanish mortgage in 2025.
Why Use a Spanish Mortgage Broker?
Many international buyers in Spain face challenges with language barriers, unfamiliar banking systems, or uncertainty about who offers the best deals. A good mortgage broker provides a bridge between you and over 20 Spanish and international lenders, helping you discover the best options, save on interest rates, and avoid pitfalls. Brokers secure preferential rates thanks to large case volumes and can guide you from the start of your property search until the keys are in your hand, ensuring a smooth and transparent process.
Fees, Regulation, and Transparency
Most Spanish mortgage brokers only charge a fee if you move forward with the mortgage application. With A Place in the Sun Mortgages / Mortgage Direct, this is as low as €695, refundable if your quoted conditions can’t be met. On approval, there’s typically a 0.6% fee of the mortgage amount, with a €1,500 minimum – lower than many competitors. Spanish law now requires brokers to be regulated, registered, and fully transparent about costs, providing clients with at least three official quotes.
When to Apply and What You’ll Need
Applying early is vital. Mortgage approval depends on your net income, outgoings, and debts, not just a simple multiplier of your salary. Generally, only up to a third of your monthly net income (after subtracting existing debts and mortgages) can go toward a Spanish mortgage repayment. Expect to provide tax returns, payslips, bank statements, and an official credit report from your home country. For buyers aged over 67 by the end of the mortgage term, banks increasingly check for sufficient pension income.
How Much Can You Borrow?
Non-residents can generally borrow up to 70% of the property purchase price or valuation, whichever is lower, but some banks may recently allow up to 75%. If you’re a fiscal resident or first-time buyer, you might access as much as 80–90%. Note that for properties under €100,000, the upper borrowing limit is usually 60%.
Costs, Taxes, and Deposit Requirements
Property buying costs in Spain vary by region. For example, Andalucia buyers should budget 10% on top of the property price, while in Valencia it can be 13%. These costs must be covered with your own cash. Usually, buyers need at least 40% of the purchase price in savings to cover the deposit and associated buying costs.
Fixed, Variable, or Mixed Rate Mortgages?
Spain’s fixed-rate mortgages are highly popular, currently offered as low as 2.5–3% for the entire term, suiting buyers wanting stability. Variable-rate options track the Euribor plus a margin, with flexible pre-payment terms, while new mixed products offer a fixed-rate period followed by a variable rate. Today, more than 90% of non-resident clients opt for fixed rates due to their predictability and low penalties.
Additional Considerations
Life insurance: Usually required, but policies from home countries may be accepted; some lenders push for extra products (insurance, alarm systems) for discounts.
Legal support: Always appoint an independent lawyer from the outset. They protect your interests, handle contracts, and ensure you never lose a deposit due to unforeseen mortgage or valuation issues.
Pre-approval: Obtain this before making offers – it strengthens your negotiating position and gives peace of mind to sellers.
Getting buyer-ready in Spain benefits from early planning, good advice, and the right professionals on your side. For tailored Spanish mortgage expertise, always consult a regulated broker and an independent lawyer.
Contact Katherine Walkerdine through A Place in the Sun Mortgages or Mortgage Direct
Contact the team at My Lawyer in Spain before you start the process so we can advise on next steps
