MORTGAGES IN SPAIN

In collaboration with our Spanish Associates, we have access to their dedicated mortgage desk. We can therefore assist with all your mortgage needs. Mortgages on Spanish properties are available for non-residents, up to 70% of the property value.

Most Spanish banks (Sol Bank, Deutsche bank, BBV, Bank of Atlantico) & Building Societies (Halifax, Norwich & Peterborough, Abbey National) will offer mortgages for properties in Spain. Off plan properties can also be mortgaged, on completion.

We can help arrange a mortgage in principle, we will be able to establish how much you will be able to borrow, this does not form a legal contract as we will need to see proof of the below details & the property must stand up to valuation.

Depending on which lender has been selected to provide your mortgage:
• The arrangement fee will be between 1% & 1.5% of the loan.
• The valuation fee will be approximately €500 depending on the property value.
• There are also the notary costs, taxes, property registration & legal fees of the lender.
• For easy calculations the above costs normally total up to between 8-9% this cost must be considered when purchasing property in Spain.

The maximum amount you can borrow will also depend on your income. In general the rule of thumb is that you will be advanced up to 3 times your gross annual income.

Mortgages are available in most currencies. We strongly advise however, that you set up your mortgage in EUROS. This safeguards your risk of exposure to currency fluctuations.

Interest rates for mortgages in Euro are based on EURIBOR (Euro Inter Bank Offered Rate). Lenders will normally charge EURIBOR + 1.25%-1.50%, individual circumstances will determine the exact interest rate, which could be higher or lower. It is common to find that some lenders offer a lower "Start up" interest rate of 4.75% for the 1st year then goes under the influence of EURIBOR + 1.25% from year 2 onwards.

Generally, the maximum repayment term is 15 years, but up to 25 years can be arranged. This will be dependent on the age of the borrower. The eldest partner must not go beyond his 70th birthday by the end of the term of the mortgage. This means that for a couple, where the eldest partner is currently 55 years old, the maximum repayment term on offer would be 15 years.

Documentation required will vary from one lender to the next. Here is a general guideline listed of paperwork you are likely to need.

If you are employed you will need to produce:
• Last 3 wage /salary slips.
•Last income tax declaration (P60 in the UK) or evidence of latest annual tax assessment (if you live in a tax-free environment then this is not applicable).
• Copies of current bank statements (last 6 months).
• Bank reference letter.

If you are self-employed you will need to produce:
• Latest income tax declaration (where applicable).
• Copies of the accounts for the last 2 / 3 years.
• Copy of your passport / residence permit (residencia) if you are a resident.
• Personal bank statements 3 months.
• Bank reference letter.
• Credit reference check documentation.