WHAT ARE THE MORTGAGE CONDITIONS FOR FOREIGNERS ACQUIRING A HOME IN SPAIN?

Last year alone, more than 61,000 home purchase transactions by foreigners were recorded in Spain, 13 % of all home purchases, an all-time record in Spain.

According to 2017 data from the Spanish Land Registry, 7 % of all mortgages to purchase a home were granted to foreigners, totalling 21,000 mortgages. This figure is not even 40 % of the total amount, but indicates fairly attractive conditions for foreign capital investment.

One of the most critical factors in the granting of a mortgage by a Spanish financial institution is whether, or not, the beneficiary is a resident in Spain.

Foreigners ordinarily residing in Spain can apply for a standard mortgage, i.e., on similar terms and conditions as mortgages granted to Spanish citizens, if the following requirements are met:

– You need to hold an account in the bank which is granting the mortgage, which needs to be headquartered in Spain.

– The mortgage instalment must not exceed 30 % of the instalments of any existing debts.

– Providing personal endorsements is not compulsory, but will improve financing conditions. If you possess other properties in Spain, home warranties will also be valued. However, this is not the case when the property is located in another country, as these assets are not especially valued by banks, due to their inaccessibility.

These conditions will change if the buyer is not a resident in Spain, it would result in a much higher interest rate. The most common rate in these cases is a fixed rate around 2.5 % over a 20-year term, and the amount financed cannot exceed 60 % of the property value, as opposed to the 40-year term and a financed amount equivalent to 80 % of the property value offered to resident foreigners.

If you are planning to apply for a mortgage from a Spanish bank and need further details on the conditions offered by your bank, please contact us. We will happily help you!

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