Mortgage on your property in Spain? Is this possible?
Below is information that may be helpful, along with a calculation example at the end.
How can I finance a property in Spain?
- You can finance the property through equity
- You can apply for a2nd mortgage on your home in the country of residence, provided there is sufficient surplus value. The rules may vary from country to country.
- Or you can apply for a mortgage at a Spanish bank.
And that’s what this article is about !
To qualify for a mortgage in Spain, there are the following rules:
- You should finance at least 20-30% of the purchase price from equity.
Banks generally finance up to a maximum of 70-80 % of the purchase price of the property for non-residents in Spain. In addition, you will also have to pay the buyer’s costs (transfer tax, notary and registration fees) of approximately 14% yourself. Thus, in total, you should have 50% equity. - You must have sufficient income.
To get a mortgage in Spain you must always be able to prove your income. Generally, you are allowed to spend 35% of your net income on housing costs. - Assessing your personal situation.
In addition to income, the bank evaluates a mortgage application on the composition of your family, whether you have a rental or owner-occupied home, the number and age of children, the type of work, the type of income, etc.
The duration of the mortgage application
The total mortgage application, from presenting your file at the bank to passing it at the notary, takes an average of 4 weeks.
The duration
The biggest difference between a Spanish bank and a Dutch or Belgian bank is the final age used to determine the term. Spanish banks have a terminal age of 75. This means that the term may run up to and including age 75. So if you are 60 years old, the maximum term is 15 years.
Calculation example of how much equity you need to bring in:
We take as an example the purchase of an apartment of € 200,000
Purchase price € 200,000
Mortgage possibility 70% of € 200,000 that is in total € 140,000
Additional costs of purchase 14% of € 200,000 is a total of € 28,000
You need to equity :
€ 200.000 – € 140.000 € 60.000
Plus 14% costs buyers € 28,000
—–
Total required equity € 88,000
These are all, of course, ´unexpected´ amounts , and may vary slightly.
If you can’t figure out the calculation yourself, or you want a confirmation of what you have calculated, you can always contact us.
We would be happy to calculate what you need in equity for a different mortgage amount.