Mortgages in Spain

Obtaining a mortgage in Spain is a simple process that becomes easier by the year, however, a lot of information guides about buying property in Spain assume that potential buyers actually have the money available, but for those who are considering buying a house in Spain, taking out a mortgage with a Spanish bank maybe an important consideration. Whether you want to buy a Finca, a holiday apartment, luxury villa or any type of new home in Spain, obtaining a Spanish mortgage may be the right solution.

Interest rates are in general much lower than in the UK, and competition between Spanish banks is fierce. If you are interested in a property still to be built (off plan), you may find that the builders already have an agreement with a certain Spanish bank to provide the mortgage and you are left with little choice. If not, you would be wise to shop around for the best deal.

Rules of thumb.

Don't accept the first offer. Ask for a copy of the bank's proposal and then take it to a different bank to see if they can improve the offer - they often do. Then take the improved offer back to the original bank - you may get a pleasant surprise!!

In all aspects you will be expected to prove ability to pay: i.e. last 3 months wage slips and bank statements of the last 6 months or, if you are self-employed, copies of your last 3 years accounts (with an auditor's stamp) and copies of you last 12 month's business bank statements and your last 6 months personal bank statements.

If you are not a legal resident in this country you will also be required to have a NIE (Numero de Identificación para Extranjeros) which is like an ID number everyone needs (residents and non-residents) in order to buy or sell property in Spain. This can easily be obtained with the help of a ´Gestoria` or your solicitor.

Non resident house-buyers in Spain.

Obtaining a mortgage with a Spanish bank does have certain key advantages - low interest rates, favourable write off conditions, easier for taxpayers to sort taxes out and no expensive bank commissions caused by international bank transactions etc. Spanish banks have targeted the non-resident property buyers as a beneficial group, and as a result a mind-boggling range of low-interest loans have invaded the market in recent years.

As the number of non-Spanish house-buyers rises in Spain, so does the offer of specific services offered by Spanish banks competing to convert foreign residents and non-residents into clients.

More and more banks employ people who can speak English, German, French and Dutch etc., especially in the areas most popular among foreign house buyers. This is particularly important if you are thinking of taking a mortgage out with a Spanish bank and most Spanish banks offer good online banking systems these days.

On a general note, If you are planning on buying property in Spain and coming over for regular periods, it is advisable to open a bank account with a Spanish bank, this avoids you having to change money every time you come over, and means that you can pay community charges, local rates, Spanish yearly property taxes and bills directly from your Spanish bank account which is much cheaper than doing so from your bank in England.